Record STI, Record Buybacks. One Of These Numbers Should Make You Suspicious π¦
Record STI, Record Buybacks. One Of These Numbers Should Make You Suspicious π¦
π The Angle
Singapore companies bought back S$1.9 billion of their own shares in the first seven months of this year. That's up from S$1.3 billion last year, and nearly double the S$772 million from two years ago. The tension: the Straits Times Index is sitting at record highs while buyback activity accelerates, when textbook logic says rising prices should make repurchases less attractive, not more.
π° What It Means For You
If you're relying on dividend income from CPF or SRS holdings, the buyback headline alone doesn't tell you whether your distribution is safe. Singtel alone accounts for almost half of that S$1.9 billion figure, yet its core yield sits below the 4.7% hurdle I use for income-focused positions. The question that matters: is the buyback funded from real operating cash flow, or from borrowings that could strain the balance sheet later? Iggy's Forensic Zone: Zone 4, Caution.
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