OCBC to start $500-m buyback!

Kudos to OCBC Bank!

It is setting aside another S$500 million for on-market purchases of its ordinary shares.

This will be OCBC Bank’s fourth S$500 million share buyback programme.

Its third programme commenced on 5 June 2006, is close to completion, with approximately S$489 million utilised and 64 million shares purchased as at 22 June 2012.

OCBC Bank intends to execute the buybacks in a controlled and orderly manner over a reasonable period of time to minimise undue movement in OCBC’s share price.|

OCBC Bank intends to hold the shares re-purchased as treasury shares to meet delivery obligations under its employee share schemes.

May I ask? When there is a share buyback, the price should go up right? becos if they buy back, then seller will get lesser and lesser.. but how come when i see some counter, even when they have a share buyback going on, the sellers seems to be always present??

Good question -- but you must be quite new to the market.
Life is not so simple. Generally, a buyback will lead to an increase in stock price over time if.....the buying is stronger than the selling. In a bear market, there could be much more selling as people think, thank you, I will sell out as things could get worse.

If you read OCBC announcement, they don't want to disturb the market -- they want to buy gradually. Don't forget that companies are not robots. They surely don't want to pay too much for the shares either. Share buybacks must make financial sense -- if, for ex, the share price is way below book value.

That's why I can't understand Sing Holdings and others. They will enhance shareholder value by buying a share that is worth $1.00 at 50 cents. But they don't.