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Turkiye: Buyback programs of companies in the stock market exceeded ₺25 billion

After the Kahramanmaras-based earthquakes, with the reduction of bureaucratic processes in Borsa Istanbul, more than 80 companies announced a share buyback program with a total size of more than ₺25 billion.

While the “Disaster of the Century” caused volatility in the markets to reach its peak, companies did not hesitate to take responsibility in this difficult period.

While the Capital Markets Board (CMB) took a series of measures to ensure healthy price formation in the period when the stock market was closed for 5 trading days, the decision to initiate a share buyback program with the decision of the Board of Directors without going to the General Assembly came to the fore.

In the statement made by the CMB, it was stated that the repurchased shares cannot be sold for a period of 30 days from the date of purchase and that the subsidiaries of publicly traded companies whose shares are traded in the stock exchange can also initiate a buyback program, on the other hand, it was stated that publicly held corporations and their subsidiaries, which have a buyback program in effect, can continue their buyback programs without the need for a separate decision by the board of directors, under the conditions specified in this decision.

BIST 100 index stabilized in the 5,000-5,200 band

While many companies announced a share buyback program after the decision, analysts said that the said step played an important role in easing the volatility that increased due to the earthquake in Borsa Istanbul.

Analysts stated that the buyback programs of companies not only support the share price, but also affect the investors psychologically positively.

Analysts, who stated that the panic atmosphere came to the fore in the transactions after the earthquake, stated that as a result of the measures taken, a slow stabilization trend was observed in the stock market.

Analysts pointed out that the balance sheet period continues and reminded that the stock market is still cheap, especially for banks, and is far from its dollar-based peak with approximately 275 points.

After closing at 4,997 level on Friday, February 3, the BIST 100 index in Borsa Istanbul decreased by more than 10% on Monday and Tuesday to 4,505 points. BIST 100 index was stabilized in the band of 5.000-5.200, above the pre-earthquake level, in the stock market, which was reopened on Wednesday, February 15 with the measures taken.

The biggest buyback program is from Turkish Airlines

After the CMB eased the bureaucratic difficulties regarding share repurchase programs, companies announced successive share buybacks, while the size of the announced programs exceeded ₺25 billion.

The duration of share buyback programs varied between 3 months and 3 years.

During this period, 81 companies benefited from the said opportunity, while the biggest share buyback program came from Turkish Airlines (THY) with ₺9 billion.

THY was followed by Isbank with ₺3 billion, Eregli Demir Celik with ₺2 billion and Halkbank and Aksa Acrylic with ₺1.5 billion. Halkbank, which had a share repurchase program of ₺750 million before, thus increased the size of the program to ₺2.25 billion.

Vakıfbank and Akbank also announced that they have started a ₺1 billion share buyback program.

Among the announced share repurchase programs, purchases of ₺1 billion or more constitute approximately 70% of the total share repurchase programs, while 51 companies announced share buybacks between ₺10 million and ₺100 million.

Source: AA / Prepared by Irem Yildiz

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