Hap Seng Consolidated Berhad has been aggressively buying back its own share in the open market. A quick check at Bursa Malaysia reveals that HAPSENG cumulative outstanding treasury shares have reached 8.15% on even date.
Shareholders are looking for share redistributions, if this materialized and assuming the company is distributing 9% of the shares, shareholder will then entitled for 1 bonus share for every 10 shares.
Hap Seng may otherwise sell the treasury share off market. But this only makes sense if they are selling at a price higher than the average purchasing cost.
Profit from the share sale can be retained as profit to be recognized in the quarterly earnings.
The third possible scenario is to cancel the shares. Reduced share numbers will enhance the net worth of the existing share, increasing EPS and for a high-yield counter like Hap Seng, translate into higher dividend per share.
Hap Seng share price was seen hovering at all-time high of 2.10 and showing a sign of resilient despite the recent sell down in the broad market.