More firms buy back shares to stabilize prices in wake of Covid-19Korea has seen a spike in the number of listed firms that have decided to buy back their own shares this year to stabilize share prices amid the coronavirus fallout, data showed Tuesday.
The data from the Korea Exchange showed 552 companies listed on the country's main and secondary stock markets that have repurchased or signed contracts to buy back their own shares as of July 17.
The number represents a whopping 4.21-fold increase from the same period a year earlier, with the value of shares involved reaching 4.7 trillion won ($3.92 billion).
In particular, 291 corporations decided to repurchase their own shares worth 2.8 trillion won after March 19, when the benchmark Kospi hit a yearly low of 1,457.64.
Major repurchasers of their own shares include SK Materials, a Korean manufacturer of parts and components, which announced a plan to buy back 118.4 billion won in shares on Thursday.
Last month, major brokerage house Mirae Asset Daewoo decided to repurchase its own shares worth 108.6 billion won.
Listed companies usually repurchase their own shares to prop up share prices or boost shareholder value.
The sharp rise in the number of firms buying back their own shares comes as the coronavirus outbreak has the Kospi hitting the skids over fears about plunging corporate profits.
"Listed companies appear to have rushed to repurchase their own shares based on an assessment that the coronavirus shock has rendered them overly undervalued," Ryu Young-jae, chief of the Korea Corporate Governance Forum, said.
Compared with numbers from late March, Korean share prices have risen sharply.
The Kospi lost 0.14 percent to close at 2,198.20 on Monday as investors locked in gains on hopes for economic relief packages in major economies.
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