Issuers Crowd Buyback Shares, Pay Attention to the Following Recommendations

Reporter: Ridwan Nanda Mulyana | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. Corporate action in the form of repurchase (buyback) the stock has been buzzing since the start of this year. The weakening of prices and the stock market as reflected in the decline in the Composite Stock Price Index (JCI) became the right momentum for issuers to buyback stock.

B-Trade Fundamental Analyst Raditya Krisna Pradana sees that the correction in the JCI, which caused the stock prices of a number of issuers to be discounted, was one of the reasons that prompted the company to do so. buyback share. That way, these issuers are able to make purchases at lower prices or at least not buy at premium prices.

“The JCI, which is currently being corrected, is the right moment to do this buyback share. We observe, the majority of issuers do buyback when the market or JCI is experiencing a correction,” Raditya told, Thursday (12/5).

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Just to remember, since the beginning of 2022, there have been at least 16 issuers that have designed and continued their actions buyback share. They are PT Jaya Real Property Tbk (JRPT), PT Provident Agro Tbk (PALM), PT Kalbe Farma Tbk (KLBF), PT Royal Prima Tbk (PRIM), and PT Medikaloka Hermina Tbk (HEAL).

Then there are PT Kino Indonesia Tbk (KINO), PT Nippon Indosari Corpindo Tbk (ROTI), PT Bank Rakyat Indonesia Tbk (BBRI), PT Asuransi Multi Artha Guna Tbk (AMAG), PT Adaro Energy Indonesia Tbk (ADRO), and PT Indocement Tunggal Prakarsa Tbk (INTP).

Then there are PT Matahari Department Store Tbk (LPPF), PT Saratoga Investama Sedaya Tbk (SRTG), PT Merdeka Copper Gold Tbk (MDKA), PT Mitra Keluarga Karyasehat Tbk (MIKA) and PT Cikarang Listrindo Tbk (POWR).

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Henan Putihrai Sekuritas Senior Technical Analyst Liza Camelia Suryanata revealed that the issuer will hold an action buyback when they see the stock price fall below its fair price. On the other hand, this move could also be a strategy to save earning per share (EPS) overall when down.

The number of outstanding shares is reduced by action buyback the. “So in the end, the earnings per share figure does not look too unequal with the previous period,” said Liza.

According to Liza, this corporate action will not necessarily boost stock prices. The price increase will be in line with the times market recovery and improving the company’s performance so that the stock price will be able to increase again to a fair or premium price.

“Action buyback logically done when stock prices are cheap. So it is not necessarily expected to hoist prices up. There are also many regulations regarding implementation corporate action this is like what percentage of shares can bebuyback in the market, “Liza explained.

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Furthermore, Investindo Nusantara Sekuritas analyst Pandhu Dewanto mentioned other factors that prompted issuers to take action buyback stock is an abundant cash balance when the market price is relatively low. At the same time, the issuer has no expansion plans that require large funding.

As a result, the company’s cash balance that has accumulated is quite large. So that cash balances can be productive, one thing that can be done is: buyback share. “What market players need to pay attention to is the valuation of the issuer’s shares, is it really cheap? Because it could be cheap only from the management’s point of view,” said Pandhu.

Market participants are also deemed necessary to pay attention to the budget and implementation period buyback. If the budget prepared is small, the impact will not be so significant. Likewise with the implementation period.

“Because during the period buyback It’s a kind of gaining confidence that the issuer will also help maintain stock prices so that they don’t fall too deep, because they get additional money demand from the issuer itself,” said Pandhu.

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Reporter: Ridwan Nanda Mulyana
Editor: Wahyu T. Rahmawati