PETALING JAYA: Share buybacks are on the rise among public-listed companies as they look to support the market price of their own companies amid the Covid-19 pandemic.
While dividends and capital appreciation may be one of the ways for a company to reward its shareholders, share buybacks can be another option, particularly when the company’s share price has dropped significantly.
The effect of a buyback is to reduce the number of outstanding shares in the market, which increases the valuation matrices that are based on the outstanding equity, like PE ratio.
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