Stock buy-back programs, its time has come now!
Stock buy back programs are the way forward on the oversold Thai Stock Exchange.
At Thaistocks.com front page I had for many weeks in August/July the statement -at the very top- that select Thai listed companies should announce and implement share buy-back programs. This would stabilize the bear market here and likely turn the SET around better then any governmental efforts with new fund announcements or other ideas.
SBB's (individual company decided stock buy back programs) offical announcements should ideally be made in concert in one period of time -so to have maximum effect. It makes sense from many company's point of views which have low debt and much cash. Including that it reduces outstanding shares, saves the dividend on those shares and likely increases its stock price due to underlying buying. It also makes a clear statement to the market which is that it views one of the best investments in now can make, which are its own shares.
A company stock price over time and so its valuation, is in the long run the firms true cost of capital; management so has a core duty to minimize cost of capital to shareholders. Besides, its wealth building to the company and shareholders. Its what turned the US market around 1987 when it experienced a similar crash to now Thailand's SET.
The time is now for many to consider such buy back programs
and thereby show conviction to the market place that during all the current turmoil of mostly a western generated "financial Tsunami", the fundamentals here remain strong.
Best Regards,
Paul A. Renaud.
