Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

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<ul>
<li>
In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019. 
	 </li>
	<li>
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.   
	 </li>
	<li>The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.</li>
</ul>
  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click <a href="https://www.sgx.com/research-education/market-updates/20200804-buyback-consideration-modern-low-earnings-take-centre">here</a> for more) and up from S$12.6 million in June (click <a href="https://www.sgx.com/research-education/market-updates/20200701-more-80-singapore-stocks-conducted-buybacks-1h20">here</a> for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August. 
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%. 
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.
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Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year. As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco. The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stocks
			</td>
			<td>
			Number of Shares/units Authorised for Purchase in Current Mandate
			</td>
			<td>
			Total Number of Shares/units Purchased in August 2020
			</td>
			<td>
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			</td>
			<td>
			Average Price Paid S$
			</td>
			<td>
			Cumulative Number of Shares/units purchased in Mandate to date
			</td>
		</tr>
<tr>
<td>
			SINGAPORE TECHNOLOGIES ENGINEERING
			</td>
			<td>
			62,429,441
			</td>
			<td>
			2,000,000
			</td>
			<td>
			$6,834,114
			</td>
			<td>
			$3.417
			</td>
			<td>
			5,000,000
			</td>
		</tr>
<tr>
<td>
			KEPPEL CORPORATION
			</td>
			<td>
			36,410,340
			</td>
			<td>
			1,120,600
			</td>
			<td>
			$5,198,660
			</td>
			<td>
			$4.639
			</td>
			<td>
			1,120,600
			</td>
		</tr>
<tr>
<td>
			GLOBAL INVESTMENTS
			</td>
			<td>
			161,476,125
			</td>
			<td>
			6,800,000
			</td>
			<td>
			$933,582
			</td>
			<td>
			$0.137
			</td>
			<td>
			11,000,800
			</td>
		</tr>
<tr>
<td>
			AEM HOLDINGS
			</td>
			<td>
			27,331,270
			</td>
			<td>
			145,000
			</td>
			<td>
			$592,621
			</td>
			<td>
			$4.087
			</td>
			<td>
			145,000
			</td>
		</tr>
<tr>
<td>
			FIRST RESOURCES
			</td>
			<td>
			158,268,446
			</td>
			<td>
			418,400
			</td>
			<td>
			$545,419
			</td>
			<td>
			$1.304
			</td>
			<td>
			418,400
			</td>
		</tr>
<tr>
<td>
			STRACO CORPORATION
			</td>
			<td>
			86,213,958
			</td>
			<td>
			550,000
			</td>
			<td>
			$273,354
			</td>
			<td>
			$0.497
			</td>
			<td>
			550,000
			</td>
		</tr>
<tr>
<td>
			SINGAPORE O&amp;G
			</td>
			<td>
			47,680,300
			</td>
			<td>
			803,724
			</td>
			<td>
			$196,268
			</td>
			<td>
			$0.244
			</td>
			<td>
			1,999,990
			</td>
		</tr>
<tr>
<td>
			GKE CORPORATION
			</td>
			<td>
			78,853,189
			</td>
			<td>
			1,500,000
			</td>
			<td>
			$118,742
			</td>
			<td>
			$0.079
			</td>
			<td>
			10,857,800
			</td>
		</tr>
<tr>
<td>
			AVARGA
			</td>
			<td>
			94,710,834
			</td>
			<td>
			539,800
			</td>
			<td>
			$81,101
			</td>
			<td>
			$0.150
			</td>
			<td>
			539,800
			</td>
		</tr>
<tr>
<td>
			CHINA SUNSINE CHEMICAL HOLDINGS
			</td>
			<td>
			97,226,160
			</td>
			<td>
			210,000
			</td>
			<td>
			$74,532
			</td>
			<td>
			$0.355
			</td>
			<td>
			210,000
			</td>
		</tr>
<tr>
<td>
			YHI INTERNATIONAL
			</td>
			<td>
			29,229,581
			</td>
			<td>
			200,000
			</td>
			<td>
			$65,077
			</td>
			<td>
			$0.325
			</td>
			<td>
			200,000
			</td>
		</tr>
<tr>
<td>
			HRNETGROUP
			</td>
			<td>
			100,652,263
			</td>
			<td>
			128,700
			</td>
			<td>
			$63,618
			</td>
			<td>
			$0.494
			</td>
			<td>
			128,700
			</td>
		</tr>
<tr>
<td>
			EUROSPORTS GLOBAL
			</td>
			<td>
			26,220,160
			</td>
			<td>
			300,000
			</td>
			<td>
			$49,787
			</td>
			<td>
			$0.166
			</td>
			<td>
			1,333,900
			</td>
		</tr>
<tr>
<td>
			JAPAN FOODS HOLDING
			</td>
			<td>
			17,360,290
			</td>
			<td>
			100,000
			</td>
			<td>
			$29,671
			</td>
			<td>
			$0.297
			</td>
			<td>
			235,700
			</td>
		</tr>
<tr>
<td>
			MDR
			</td>
			<td>
			89,039,757
			</td>
			<td>
			300,900
			</td>
			<td>
			$26,361
			</td>
			<td>
			$0.088
			</td>
			<td>
			300,900
			</td>
		</tr>
<tr>
<td>
			BAN LEONG TECHNOLOGIES
			</td>
			<td>
			11,392,300
			</td>
			<td>
			62,500
			</td>
			<td>
			$15,929
			</td>
			<td>
			$0.255
			</td>
			<td>
			62,500
			</td>
		</tr>
<tr>
<td>
			CHOO CHIANG HOLDINGS
			</td>
			<td>
			20,800,000
			</td>
			<td>
			46,800
			</td>
			<td>
			$9,862
			</td>
			<td>
			$0.211
			</td>
			<td>
			55,800
			</td>
		</tr>
<tr>
<td>
			INTRACO
			</td>
			<td>
			10,292,587
			</td>
			<td>
			5,000
			</td>
			<td>
			$1,253
			</td>
			<td>
			$0.251
			</td>
			<td>
			5,000
			</td>
		</tr>
<tr>
<td>
			Total
			</td>
			<td>
			 
			</td>
			<td>
			15,231,424
			</td>
			<td>
			$15,109,950
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
		</tr>
</tbody></table>
Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments. 
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click <a href="http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/company_announcements">here</a>). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.
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In August, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, higher than the S$3 million in consideration for July 2020, and seasonally lower than the S$70 million buyback consideration reported in August 2019.  
	 
	
STI constituents Singapore Technologies Engineering and Keppel Corporation led the buyback consideration in August. As many as 11 companies commenced new mandates, which included Keppel Corporation, AEM Holdings, First Resources and Straco Corporation.    
	 
	The STI booked its first price gain in August since 2006. Together, the SPDR® STI ETF and Nikko AM STI ETF saw net creations of S$704 million over the first eight months of 2020 as investors continued to accumulate units. The S$704 million is up 300% from total net creations of S$176 million for the entire 2019 year.

  
Total share buyback consideration for the month of August totaled S$15.1 million, up from S$2.9 million in July (click here for more) and up from S$12.6 million in June (click here for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$681 million for the first eight months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$681 million represents 0.08% of the combined S$815 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of August.  
The S$15.1 million in August buyback consideration coincided with a 0.1% price gain in the Straits Times Index (“STI”) to 2,532.51, the narrowest monthly price move by the STI since March 2019. Dividend distributions boost the STI total return in August to 1.1%. This was the also the first time since 2006, that the STI booked a price gain in the month of August. The total number of COVID-19 cases grew from 17 million at the end of July, to 25 million at the end of August, whilst the total mortality rate declined from 3.9% to 3.4%.  
The STI’s 0.1% price gain in August saw its 10-day historical volatility again contained between 10% and 20% for the entire month. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.



      
    
    Buyback Consideration

      
    
    Buyback Consideration


Source: SGX (Data as of 31 August 2020)

Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$704 million over the first eight months of 2020 as investors accumulated units amidst the market declines. The S$704 million is up 300% from the total net creations of S$176 million for the entire 2019 year.  As many as 11 of the 18 companies commenced new buyback mandates in August - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco.  The table below summarises the buyback considerations in August 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.




			Stocks
			
			
			Number of Shares/units Authorised for Purchase in Current Mandate
			
			
			Total Number of Shares/units Purchased in August 2020
			
			
			Total Buyback Consideration  (including stamp duties, clearing changes etc.) paid or payable for the shares in August 2020
			
			
			Average Price Paid S$
			
			
			Cumulative Number of Shares/units purchased in Mandate to date
			
		


			SINGAPORE TECHNOLOGIES ENGINEERING
			
			
			62,429,441
			
			
			2,000,000
			
			
			$6,834,114
			
			
			$3.417
			
			
			5,000,000
			
		


			KEPPEL CORPORATION
			
			
			36,410,340
			
			
			1,120,600
			
			
			$5,198,660
			
			
			$4.639
			
			
			1,120,600
			
		


			GLOBAL INVESTMENTS
			
			
			161,476,125
			
			
			6,800,000
			
			
			$933,582
			
			
			$0.137
			
			
			11,000,800
			
		


			AEM HOLDINGS
			
			
			27,331,270
			
			
			145,000
			
			
			$592,621
			
			
			$4.087
			
			
			145,000
			
		


			FIRST RESOURCES
			
			
			158,268,446
			
			
			418,400
			
			
			$545,419
			
			
			$1.304
			
			
			418,400
			
		


			STRACO CORPORATION
			
			
			86,213,958
			
			
			550,000
			
			
			$273,354
			
			
			$0.497
			
			
			550,000
			
		


			SINGAPORE O&amp;G
			
			
			47,680,300
			
			
			803,724
			
			
			$196,268
			
			
			$0.244
			
			
			1,999,990
			
		


			GKE CORPORATION
			
			
			78,853,189
			
			
			1,500,000
			
			
			$118,742
			
			
			$0.079
			
			
			10,857,800
			
		


			AVARGA
			
			
			94,710,834
			
			
			539,800
			
			
			$81,101
			
			
			$0.150
			
			
			539,800
			
		


			CHINA SUNSINE CHEMICAL HOLDINGS
			
			
			97,226,160
			
			
			210,000
			
			
			$74,532
			
			
			$0.355
			
			
			210,000
			
		


			YHI INTERNATIONAL
			
			
			29,229,581
			
			
			200,000
			
			
			$65,077
			
			
			$0.325
			
			
			200,000
			
		


			HRNETGROUP
			
			
			100,652,263
			
			
			128,700
			
			
			$63,618
			
			
			$0.494
			
			
			128,700
			
		


			EUROSPORTS GLOBAL
			
			
			26,220,160
			
			
			300,000
			
			
			$49,787
			
			
			$0.166
			
			
			1,333,900
			
		


			JAPAN FOODS HOLDING
			
			
			17,360,290
			
			
			100,000
			
			
			$29,671
			
			
			$0.297
			
			
			235,700
			
		


			MDR
			
			
			89,039,757
			
			
			300,900
			
			
			$26,361
			
			
			$0.088
			
			
			300,900
			
		


			BAN LEONG TECHNOLOGIES
			
			
			11,392,300
			
			
			62,500
			
			
			$15,929
			
			
			$0.255
			
			
			62,500
			
		


			CHOO CHIANG HOLDINGS
			
			
			20,800,000
			
			
			46,800
			
			
			$9,862
			
			
			$0.211
			
			
			55,800
			
		


			INTRACO
			
			
			10,292,587
			
			
			5,000
			
			
			$1,253
			
			
			$0.251
			
			
			5,000
			
		


			Total
			
			
			 
			
			
			15,231,424
			
			
			$15,109,950
			
			
			 
			
			
			 
			
		

Source: SGX (Data as of 31 August 2020)

 

Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments.  
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click here). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.



China Sunsine Chemical Holdings Ltd (CSSC SP)

11 Companies Commence New Share Buyback Mandates in August