This article first appeared in Capital, The Edge Malaysia Weekly on April 7, 2025 - April 13, 2025

COMPANIES listed on Bursa Malaysia are turning to share buybacks to prop up their stock prices amid the recent weakness in the stock market. The FBM KLCI is in the red year to date (YTD), down 7.1% to close at 1,526.52 points last Wednesday. Some RM230 billion in market value has been wiped off from Malaysian stocks during this period. 

The Edge’s compilation of share buyback activities since mid-February show Yinson Holdings Bhd (KL:YINSON) forking out the highest sum to buy back its own shares. The global energy infrastructure and technology company spent nearly RM170 million to scoop up 75.9 million shares or 2.7% of its total issued shares on the open market, paying prices ranging from RM2.03 to RM2.36 apiece.

Since the start of the year, the stock has fallen 18.6% to close at RM2.15 last Wednesday for a market capitalisation of RM6 billion.

The latest share buyback will not be the first time Yinson has purchased its own shares, having acquired over RM150 million worth of shares in 2022.

Yinson’s net profit for its financial year ended Jan 31, 2025 (FY2025) contracted 22% to RM752 million from RM964 million in the previous year, as fourth-quarter 2025 (4QFY2025) net earnings halved to RM146 million from RM278 million a year earlier, mainly due to lower contribution from its engineering, procurement, construction, installation and commissioning business.

Yinson, which operates floating production storage and offloading vessels for charter, recently completed its Agogo FPSO three months ahead of schedule. It is also considering a spin-off and separate listing of its FPSO business, which is parked under Yinson Production Offshore Holdings Ltd.

Meanwhile, Ancom Nylex Bhd (KL:ANCOMNY) spent RM30.3 million to buy back 30.9 million of its own shares, at 95.5 sen to 99.5 sen apiece. The share price of the integrated chemical group has fallen 5.4% YTD to close at 95.5 sen last Wednesday, valuing it at RM1 billion.

Hibiscus Petroleum Bhd (KL:HIBISCS) has also been aggressively buying back its shares to the tune of 16.9 million shares or 2.3% of its total share base. The block shares were purchased for a total of RM28.2 million, or RM1.40 to 1.93 per share.

Since touching nearly RM3 a year ago, the oil and gas exploration and production outfit’s shares have shed 36% to close at RM1.91 last Wednesday for a market value of RM1.4 billion.

In the latest quarterly results, Hibiscus Petroleum posted an 18.6% decline in net profit to RM83.26 million for the October-December 2024 quarter from RM102.34 million a year ago, owing to higher costs of sales and higher taxes paid. The average selling price for oil, condensate and gas was lower at US$55.46 per barrel, from US$70.31 per barrel a year ago.

As at end-December 2024, Yinson, Ancom Nylex and Hibiscus Petroleum were in a net debt position of RM13.4 billion, RM141.2 million and RM346.5 million respectively.

The continuing market volatility is also providing companies with solid cash positions “more reasons” to repurchase their own shares, say industry experts. With a net cash position of RM1.58 billion, Kossan Rubber Industries Bhd (KL:KOSSAN) has purchased 8.6 million shares for RM15.5 million, at a price range of RM1.66 to RM1.90 per share, since mid-February.

The glove maker has been supporting its shares after the stock slipped below the RM2 level.

A sell-off in Kossan shares was triggered last month following management’s weak guidance on its business outlook. Its sales volume is expected to be lower in 1Q2025 due to US customers front-loading their orders in 4Q2024. The rapid capacity expansion by Chinese glove makers is also a key risk for its sales performance.

On US President Donald Trump’s sweeping range of reciprocal tariffs announced last week, Kenanga Research is “neutral to positive” on this latest development as the overall impact on Malaysian glove makers is still net positive.

“Factoring in the more than 100% tariffs imposed on China medical gloves in 2025/26, the pricing gap between Malaysia and China producers for US exports is still wide. Hence, there should be no changes to the current industry landscape for US markets,” it says in an April 3 research note.

Come April 9, Malaysian exports to the US will be hit with a 24% tariff, while Chinese goods to the US will face a combined total tariff of 54% following the latest 34% rate slapped on Beijing. Trump had already imposed a 20% levy on China after he took office early this year.

Batu Kawan Bhd (KL:BKAWAN) and TSH Resources Bhd (KL:TSH) are the two plantation stocks that have been actively buying back their shares this year, forking out RM5.3 million and RM17.8 million respectively. Their cash and short-term funds stood at RM3.14 billion and RM266.32 million respectively as at end-December 2024.

AMMB Holdings Bhd (KL:AMBANK) is the only bank that has undertaken a share buyback exercise since the market sell-off. Although banking stocks were less affected by selling pressure, AMMB bought back its shares at RM5.48 to RM5.77 apiece for a total of RM18.2 million. The banking group’s share price has gained 5.5% YTD to close at RM5.78 last Wednesday for a market value of RM19.1 billion.

AMMB’s cash and short-term funds stood at RM 5.13 billion as at Dec 31, 2024.

Bermaz Auto Bhd (KL:BAUTO), which mainly assembles Mazda vehicles, has spent RM7.8 million to buy back its shares at 99 sen to RM1.25 apiece since mid-February. 

Shares of BAuto have been on a downward trend since the middle of last year on the back of stiff market competition, especially with rising Chinese automakers in the domestic market. Closing at RM1.11 last Wednesday, the stock had tumbled 30.6% since the start of the year.

BAuto saw its net profit for its 3Q ended Jan 31, 2025 tumble 66% year on year to RM24.14 million on lower sales volume from the domestic operations of its Mazda and Kia marques, as they were mainly impacted by the continuous influx of competitively-priced Chinese-made vehicles into the market. BAuto had a net cash position of RM244.75 million as at end-January 2025.

Technology companies Mi Technovation Bhd (KL:MI) and Frontken Corp Bhd (KL:FRONTKN) are also taking the opportunity to support their share prices. The firms are sitting on a net cash position of RM297.7 million and RM489.8 million respectively.

Given the recent knee-jerk reaction to the market sell-off, especially with the persistent foreign outflows, Rakuten Trade Sdn Bhd head of research Kenny Yee says a share buyback is a better tool for companies to stabilise their share prices.

Areca Capital Sdn Bhd CEO Danny Wong says it makes sense for companies with healthy cash flow to buy back their shares, especially if the funds may not be utilised in the near term. “As the share prices fall, companies could gain from the treasury shares. By cancelling the treasury shares, it will improve the earnings per share.”

The shares bought back by these companies will be retained in the form of treasury shares, which will then be sold in the market for a profit, distributed to shareholders via a dividend payment, or cancelled to reduce the shares outstanding.

Buying back their shares allow companies to support their share price during periods of sluggish market conditions or when their shares are undervalued or thinly traded. Even international companies have done so. For example, AIA Group Ltd announced recently that it would start a US$1.6 billion (RM7.11 billion) share buyback exercise amid the strong momentum in its business.

Given the latest round of Trump tariffs, global financial markets are expected to remain volatile in the months ahead, which could see more companies undertaking share buyback exercises to maintain their share prices. 

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