I think the issue here is (1) they are buying back using funds which they had just obtained from the capital market, part of which was to re-pay earlier debts, and (2) the price rise(s) in its counter has an artificial element as a result of their continuous buying of treasury shares and not so much of the wider spontaneous market sentiments. There is no doubt in my mind a bubble is building up. The question is, when will the bubble burst? With no debt retirement programme in place, their external debt is continuously being rolled over by using funds obtained from new capital market placements. Imagine what would happen if one day, for whatever reason (although the reason may have become obvious to some already), there are no more underwriters willing to indulge in new instruments to finance such debts. would a domino effect start to unravel. Due to no debt retirement policy year after year, this is a very heavily geared operation whose survival hinges on the confidence of its bankers and capital market underwriters in the ostensible market value of its share to ensure its continuous existence. All the recent outpouringof responses in defence against the allegations made through the various media avenues, including the Chairman's letter to shareholders, are not so much for the consumption of the investing public per se, but rather, directed more to the managers and powers that be in the capital market on whose hands its survival depends.
