13 firms ‘better-positioned’ to launch buyback offers: Aljazira Capital

At least 13 companies on the Saudi Stock Exchange (Tadawul) potentially meet the Capital Market Authority's (CMA) regulations to initiate share repurchase program, Aljazira Capital said in a new report.

While the CMA criteria are mostly subjective, the report said most of the regulations could be fulfilled by companies when making buyback offers. It added that all listed banks could potentially buy back shares as well as companies, not included in the list, are expected to buy back shares under their employee incentive programs.

Share buybacks are taken as a positive signal by investors and reflect the company/management confidence in its own business, which generally acts as a positive catalyst for the company’s share price, Aljazira Capital said.

However, it warned a company could use buybacks to provide false signals to the market by artificially boosting earning per share and causing a short-term rise in the stock price.

In August, National Commercial Bank (NCB) completed the first phase of buying back 2.1 million shares of its executive employees’ stock program, after obtaining shareholders’ approval in May 2016.

The firms as mentioned by Aljazira Capital are listed below:

1) Saudi Basic Industries Corp

2) Saudi Telecom Co.

3) Saudi Airlines Catering Co.

4) Saudi Ground Services Co.

5) Al Tayyar Travel Group Holding Co.

6) Jarir Marketing Co.

7) Saudi Arabia Fertilizers Co.

8) Dallah Healthcare Holding Co.

9) Saudia Dairy and Foodstuff Co.

10) Herfy Food Services Co.

11) Taiba Holding Co.

12) Saudi Company for Hardware

13) Aseer Trading, Tourism & Manu Co.