Since the PSE relaxed the buyback policy in late 2000, a number of listed firms have consistently embarked on accumulating more shares from the market every year.
The PSE allowed the share buyback policy as "a positive move not only to allow listed companies to take advantage of attractive prices of their own shares but also to inject needed liquidity into the market place for the benefit of the investing public."
Roxas Holdings Inc., the country’s largest sugar producer, was the latest company to engage in a buyback program as its board approved the repurchase of 20 million shares within one year.
"The decision to buy back is due to the company’s desire to take advantage of the low market share price and acquire treasury shares which may later be distributed as dividends," the company said.
Aside from Roxas Holdings, companies actively pursuing the buyback program include Aboitiz Equity Ventures Inc., ABS-CBN Broadcasting Corp., San Miguel Corp., La Tondeña Distillers Inc., Jollibee Foods Corp., Alaska Milk Corp. and Interphil Laboratories.
"The rationale for the buyback was that market prices did not reflect the true value of the shares and therefore, remaining shareholders would benefit from a buyback into treasury that reduced the number of outstanding shares also provides the guidelines for the actual share purchases," AEV said.
Of the more than 230 listed companies at the PSE, more than half have experienced drastic drops in their stock prices, even falling down below par value, due to the slump in the stock market.