Total share buyback value plunges to $2.9m in July

The low level of buyback consideration coincided with a 2.3% decline in the STI.

Total share buyback consideration sunk to $2.9m in July, significantly lower from $12.6m in June and down from the $14.9m recorded in May, according to SGX’s figures.

Thirteen stocks conducted buybacks in July, totalling around 25.78 million shares. Singapore Technologies Engineering (ST Engineering) led the pack as it bought back 500,000 shares for $1.66m, followed by Global Investments which bought back around 2.9 million shares for $399,116.

Spackman Entertainment Group bought back the highest number of shares at 20 million, collectively garnering $200,621.

This has brought the total consideration of share buybacks for SGX primary-listed stocks to $666m for the first seven months of 2020, higher than the $590m posted in 2019 despite the drastic drop in July.

Further, SGX noted that whilst buybacks are expected to slow ahead of earnings, this was the lowest monthly considerations recorded since SGX Market Updates began reporting buyback considerations in October 2014.

The low level of buyback consideration coincided with a 2.3% decline in the Straits Times Index (STI) to 2,529.82, the narrowest monthly price move by the STI since January.

The overriding factor underpinning market sentiment across all asset classes was the resurgence in COVID-19 cases in July. The total number of COVID-19 cases grew from 10 million at the end of June, to 17 million at the end of July, whilst the total mortality rate declined from 4.9% to 3.9%.

STI’s 2.3% decline in July also saw its 10-day historical volatility contained between 10% and 17% 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.