|
|
| • EXCH RATES |
|
Baht/$ 33.47/52
Bid/Ask
|
GOLD |
Closed
-
|
|
STOCKS
NUNTAWUN POLKUAMDEE
With Thai stocks down 22% from the start of the year, listed companies should consider treasury stock programmes to help support share valuations.
Patareeya Benjapolchai, the president of the Stock Exchange of Thailand, said companies whose shares were trading below their fundamental values should consider treasury stocks.
A treasury stock or re-acquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market. Listed companies can seek shareholders' approval to buy back up to 10% of their stocks under the programme.
In theory, share buybacks will help boost share prices by reducing the supply of outstanding shares in the market.
Mrs Patareeya said listed companies could conduct the programme so long as they had accumulated net profits, adequate liquidity and the capability to service their short-term debts.
In any case, the SET still requires companies to maintain a free float of at least 15% of capital to maintain their listed status.
Companies can buy back their shares either directly from the SET main board or through a general offering. Offer prices are capped at no more than 15% of the average trading price of the stocks over the previous five business days.
A company under a treasury stock programme can resell the shares to the market six months after the buyback programme is completed.
Mrs Patareeya said the SET preferred that companies sell back treasury stocks to the general public to help maintain free floats.
''Many fundamental stocks are quite cheap and undervalued now. Long-term investors, such as long-term equity and retirement mutual funds, are increasing their activity, but by themselves, it's not enough to really boost market value,'' she said.
''Listed companies with strong financial positions should consider treasury stocks to help boost their valuations, as earnings per share ratios rise with each buyback.''
Mrs Patareeya said the SET would hold talks with the Listed Companies Association to encourage more firms to consider treasury stock programmes.
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Next
