DUTY-FREE INTERNATIONAL: Aggressive buying back of shares

This chart was updated after the market closed on Jan 18 to reflect the full week's (Jan 14-18) data.

DUTY FREE INTERNATIONAL has attracted active discussion in our forum, so we decided to put together the chart on the right.

From the chart, and that of the stock price movement, one can see:

1. Duty Free's buyback has been rising non-stop since it began in December, marking the first such action ever since the company was listed on the Singapore Exchange in January 2011.

2. The stock price has surged along with the buyback.

3. The buyback in just two days in the current week (Monday & Tues) has far exceeded the total bought in any previous week.

4. Percentage-wise, the current week is seeing the highest at 72% of the total volume of Duty Free shares traded for the period.

5. The current week's buying is notable for its beneficial impact on the share price, supporting it at a time when the broad market was correcting.

Duty Free stock has risen from 33 cents to a 52-week high of 43.5 cents since the start of the company's buyback.

Duty Free has a clear intent regarding the shares it bought back: It cancelled them immediately, instead of classifying them as treasury shares which could be re-issued out in future when stock options are exercised, or as currency in M&A activities.

The cancellation of the shares led to a drop in the outstanding shares. The total cancelled to date is 9,895,000, or 0.8873% of the issued shares of the company.

It is not an overwhelming figure, but Duty Free doesn't have a high free float to begin with. Its No.1 shareholder, Malaysian listed company Atlan Holdings, holds 81.1%.

Duty Free may or may not continue its buying spree which has cost roughly S$4 million, but it is going to be raking in a big cashpile (by March 2013) from the completion of the sale of The Zon in Johor for RM325 million.

But if it continues to buy back shares and cancels them, liquidity will be reduced.

This is contrary to what many companies like to happen to their own shares, and raises questions as to whether there is some larger over-riding reason behind the buying and cancelling of shares.

Your views are welcomed. Post below or in our forum!

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Comments

#42 divads 2014-06-10 15:31

Buy back started again late May 2014.

Berjaya waterfront aka duty free zon rumoured to have a casino?

#41 Alex 2013-03-17 08:53

While I agree with Divads analysis, I believe that the company recent did a small buy back of shares at 0.4299 (102 lots), and they currently only bought back 1.04%, their mandate is 10%. i think should have support at least at 0.42 to 0.425. besides INDEPENDENT director bought 1 million warrants at 0.10, execution price 0.35, that makes it 0.45.

So with land deal, latest share buyback (after break so long), director take up interest --> I bought back 20 lots at 0.425 the other day. I queue to sell already, TP: 0.47.

I already made a lot of profits, now second bite at cherry. wish me luck.

#40 7169 2013-03-16 10:01

Financial mth is Feb. So it will not be reflected in coming financial statement Q4 2013 to be released next mth. It will however be reflected in Q1 2014 which will be out in July 2013. So we have to wait till July, Q1 2014 then we will know what they will do with the money.

This completion is expected, so impact will not be felt immediately I think.

Then we also need to know how much rental they are paying to operate from Zon Berjaya now. Is the rental too high to affect the profit margin??

Have to wait till July. In the meantime, usually in Q2 and Q3, share market will be bearish based on past trend (past few years).

And Duty free has become illiquid recently as the amount of free float is getting lesser and lesser due to the share buyback.

I will stay sideline at the moment. If market becomes bearish and couple with illiquidity of the share, I scared being trapped.

But all along I like this share :-).

#39 Alex 2013-03-15 14:13

Hey divads and garl,the land deal WENT THROUGH:

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_2B91A254E36C0ACF48257B2F002BADD0/$file/DFI_Completion_of_Sale_15032013.pdf?openelement

#38 Alex 2013-03-14 11:33

Garl and divads: I lock and load another 25 lots 0.425 today.

Sold all at 0.48, 0.475. 4 days to Land Report. Huat Ah. Buy up for us 0.43 to show support?

#37 Alex 2013-03-01 17:46

To Garl: you ask why I sold at 0.48? I sold because I wanted to lock-in profits. Turned out to be the best decision ever: now only 0.435. I am locked and ready to load at 0.42! earn 0.06 difference. I intend to go in 100 lot 0.42.

divads: I think u r more or less right about the BB and support. But tbh with less than 17 days to the "land deal" I think, the share price from 0.435 can surge to at least 0.48. However, i won't buy unless 0.42 or below: too risky.

all the best the bros still vested.

#36 Alex 2013-02-22 18:21

Bro divads, I clear all my shares at 0.48 today at day high already. now 0.455.

I bought 0.28 sell 0.48 --> thanks for the stock tip.

But you sold at 0.38 lose 10c, sometimes just have more faith

#35 chrischin 2013-02-20 19:21

After pausing and well rested, is it going to break the high of 45 cents and march on?

#34 Alex 2013-02-05 13:14

divads, you are confirm wrong already. today closing 0.415 huge huge huge buyup. now 0.415, sell 0.42!!! you sold I assume 0.39-0.39 and I refer to you comment yesterday: "I rest my case". I also rest my case. thanks for recommending dutyfree but we can't listen to your sell call.

awaiting your responses

#33 Alex 2013-02-05 09:33

and you see your Ley Choon: recommend at 0.22-0.225 now 0.21 possible 0.205. still guru???

#32 Alex 2013-02-05 09:31

well, you see the price yourself...I rest my case... 41c huge buyback, admit you are wrong. whole market correction, duty free chiong

#31 7169 2013-02-04 06:19

well.. u see the price urself.. I rest my case..

#30 Alex 2013-01-30 15:23

bro divads, now everday 41c WITHOUT BUYBACK. why you so silent? there is as of closing 344 lots still left to clear at Buy Q at 0.41c!so even if i sell down all my stock still got support lei! as march inch closer, i hope i huat! ley choon down lei!

#29 7169 2013-01-25 03:57

haha.. last week u said the same thing..remember ? if u have sold.. u can then buy back cheaper at 39.5 cents :-)

#28 7169 2013-01-25 03:55

tonite dow jones going to drop becos of apple. Dun know today is due to sentiment or buyback?

One word of advice my friend: Dun be greedy :-)

#27 Alex 2013-01-25 03:43

divads huge huge buy back up. now 0.405. i sold 41 lots at 0.405. left 459 lots now!!!! im not selling already, what say you???

#26 8072 2013-01-25 02:08

When climbing up steep hill or mountain, we need to pause and take a breather .........

#25 7169 2013-01-23 16:13

think today Wednesday no buy back...

#24 7169 2013-01-23 01:28

haha.. I try not to fall in love with a counter so I move on to another counter...

Unless this one drop to 28-32 cents.. :-)

There are some thing I need to find out first before I will buy duty free again.. Like how much is the rental for the JB Zon, since they intend to rent the place for 25 years. Would it affect the profit?? So maybe after the post JB Zon sale financial results, then we have a clearer picture. They never announce how much rental they are paying for JB Zon right?

#23 Alex 2013-01-22 16:29

okay thanks for the advice. I know you mean well. let's see how, now is mid jan, the land deal goes through in two months max (18th March). also they are not alot of sellers left in the market. see how, if i clear I would let you know. honestly, are you looking to buy back if it drops to 35-36?

#22 7169 2013-01-22 16:21

ya. they are aggressively buying back but not aggressively pushing becos there is a formula. Their max buying price is 105% of previous 5 days average. Since the closing price has dropped for the last few days, so they are buying back at a lower price. Their aim seems to be supporting the price.

The worry is when market turns bearish, even with their buy back, you may not be able to sell your 500 lots, which is quite a lot.

Like I sold my shares (quite a lot too) at around 40 cents, but if I were to sell now, I think I am lucky to fetch 39-39.5 cents. Imagine there may be other holding 500 lots like you and they throw. Then based on the lower closing price, the buyback price will also be lower and you may be trapped.

Italy election coming soon and I bet euro crisis will come back.

:-)

hope it helps

#21 Alex 2013-01-22 16:06

Bro divads, share buyback RESUMES!!! TODAY share buyback 200 lots at 0.395!!!!!!!!!!!!!!!!!!!!!!!!

Thank you for your advice, I guess and know you mean well. what do u tink of the share buyback? i think they will want to support share price at 0.390-0.40 but they do not want to push it too high.

#20 7169 2013-01-22 13:39

I means stop their share buyback I think

#19 7169 2013-01-22 13:39

Alex... I think duty free stop already. I think maybe good that u take profit becos I been monitoring this stock for a long time. When the volume decreases, there is really no buy queue for you to sell. And you have 500 lots!!! not easy to sell...

Italy election is coming.. Euro crisis coming back again soon...

Not trying to push the price down, just trying to help a fellow forummer, your 500 lots is really quite huge and not easy to sell if market turns for the worse.

#18 divads27 2013-01-22 01:58

yes.. in fact 331 lots buying . Shd be an individual trying to buy 500 lots. Last Friday he/she bought 100+ lots at 40 cents and then queue 331 at 40.5 cents. On Monday, he queue again 331 lots at 40 cents which he has managed to get most, left 91 lots to buy. Well, today Tuesday I think he will try to buy the rest but after that I dunno if there ia anymore support already.. We shd see.

Monday: A lot of selling..
16:56:39 0.400 1 B
16:56:38 0.400 15 B
16:51:10 0.400 15 B
16:42:54 0.400 30 B
16:40:15 0.400 10 B
16:40:15 0.400 119 B
16:39:02 0.400 10 B
16:39:02 0.400 10 B
16:12:26 0.400 10 B
16:12:26 0.400 10 B
16:12:26 0.400 10 B
09:26:38 0.405 50 S

#17 Alex 2013-01-21 18:27

Did u see the buy support q at 0.40 today?

#16 7169 2013-01-21 15:15

divads27 - Wednesday, 16 January 2013 14:50They cant buyback forever.. refer to it's past record of buying back in bursamalaysia.. Most likely they are trying to stablise the share price at around 35-42 cents.

ok.. Friday 18th Jan 2013: bought back 50 lots
Today Monday 21st Jan 2013: no buying back

My prediction was correct.. If you dun sell now, the volume will get lesser and lesser until there is not enough volume for you to sell if you are holding a large number of shares.

It was never my intention to create panic, I was advising based on what I observed. My aim is to help people earn $$$. One must not fall in love with a particular share. There will be a time to buy and time to sell..

#15 chris 2013-01-18 17:05

At this point, does anyone seriously think a privatisation of the company is on the cards? What are the odds?

#14 Divadsjoker 2013-01-18 14:05

I challenge divads to talk. divads:

Dec 12, 150 lots, $0.325 = 48,750
Dec 13, 156 lots, $0.328 = 51,168
Dec 14, 20 lots, $0.33 = 6,600
Dec 18, 200 lots, $0.35 = 70,000
Dec 19, 100 lots, $0.35 = 35,000
Dec 21, 220 lots, $0.375 = 82,500
Dec 26, 462 lots, $0.38 = 175,560
Dec 27, 500 lots, $0.38748 = 193,740
Dec 28, 700 lots, $0.38964 = 272,748
Jan 2, 550 lots, $0.39 = 214,500
Jan 3, 350 lots, $0.39714 = 138,999
Jan 4, 840 lots, $0.40471 = 339,956.4
Jan 7, 500 lots, $0.4070 = 203,500
Jan 8, 200 lots, $0.415 = 83,000
Jan 9, 350 lots, $0.42286 = 148,001
Jan 10, 600 lots, $0.42692 = 256,152
Jan 11, 580 lots, $0.42690 = 247, 602
Jan 14, 980 lots, $0.4156 = 407,288

Ever since divads bro doomsday prediction (just because you sell, dont ask others to sell, create panic):
Jan 15, 2427 lots, $0.39378 = 955,704.06
Jan 16, 700 lots, $0.39429 = 276,003
Jan 17, 300 lots, $0.3925 = 117,750
Jan 18, 50 lots, $0.39 = 19,500
Total shares till date = 10,935,000
Total Value Bought till date = 4,344,021.46
Average Price (per lot) = 0.39725848

#13 Alex 2013-01-18 11:59

Bro Divads 41 c now wat say you? Come on! 50c i ask u out buy u a meal

#12 Divadsjoker 2013-01-18 11:32

Divads 321 lots buy q support at 0.40. Today shld be the 4th day in a row since divads made the doomsday prediction. Bro divads, respond lei.

#11 Alex 2013-01-17 16:55

One cannot see today 300 lots, think buyback is stopping. 300 lots of 586 lots is a lot, more than 50%. Suspect: very little seller left (mostly contra) and also company want to keep weighted average down -- now 11.1million share bought back around 0.395. I think they will delist 20% premium at 46c.

#10 chris 2013-01-17 15:52

if company continues to buy over a few months, it will keep share price at above 40c, and eventually it would dry up the free float. logical conclusion --- privatisation. if buyback peters off, the price will surely come down. what is the point of all the buy bk? I AM CURRENTLY LEANING TOWARDS VIEW TAT A PRIVATISATION IS ON THE CARDS

#9 Alex 2013-01-17 09:50

I don't think it is undervalued or rather PE is not the only indicator of undervalue. what goldmansion is saying is that so much share buyback at high prices means management feels shares is undervalued. there is strong support at 0.395 and 0.40.

I think we can look forward to: (1) more share buyback and (2) Land deal --> special dividend --> even with no special dividend --> cash balance will improve a lot. up to you, bro divads the guru, you can listen to him. I will stick to my guns 500 lots, min sell price 43cents. Im looking to sell above 45 cents in actual fight.

#8 Au 2013-01-17 03:04

revenue growth 5%, n. profit 18% for 9m FY. stable biz but how is it undervalued when PE is abt 18?

#7 goldmansion 2013-01-16 20:10

Management probably think shares are still
undervalued.

#6 Alex 2013-01-16 17:23

I am vested 500 lots at 0.28. I hope it rises, after that I confirm ask you out buy you a meal. I think so long as we flush out contra players (limited cause majority buyback is dutyfree) and those panicky people, dutyfree will rise. market correction is due to PROPERTY CURB. two things: (1) dutyfree land deal is done and dusted, (2) property become unattractive, where retail investors turn to? stock market? which company? dividend high and share buyback company or your yongnam that doesn't move? you decide.

#5 Alex 2013-01-16 17:19

Divads, I think you are quite contradictory especially when you hold and don't hold shares. A statement like they cant do share buyback forever who don't know how to say? It's like me saying Duty Free going to buy back till next year. unsubstantiated and ungrounded. ever since your doomsday all yesterday, duty free proved you wrote swooping for insane amount of stocks, yesterday 2.421 million out 2.7 million, today 700,000 out of 1 million. which company if stock price no support will do that? remb hor directors owe duty to company to act in their interest. I agree that market sentiment is bad with all the retail investors cause you are the guru say sell, they all panick. but come on, give duty free its full credit.

#4 Daisy 2013-01-16 11:51

Interesting views. As to equating money spent on buyback = dividends foregone, it's not necessarily so. they have lots of cash coming from The Zon disposal which makes the S$4 m spent look very puny. Lots of cash-rich companies do buybacks without cutting back on dividends. :-)

#3 7169 2013-01-16 10:51

dun forget that the money spent would otherwise be given as dividend.. so there is a trade off..

#2 7169 2013-01-16 10:50

They cant buyback forever.. refer to it's past record of buying back in bursamalaysia.. Most likely they are trying to stablise the share price at around 35-42 cents.

I predict buyback will stop for awhile and they will see if enough momentum is generated.. if not, then perhaps they buyback again. In the meantime, wait for contra players to clear and force selling to clear too.. But with the USA debt ceiling crisis, in a bear market, is pouring money away to support the share price.. so I think better wait and see

#1 dutybound 2013-01-16 10:02

From the chart, I believe it's likely there is some overhang from last week for contra selling this week, including possibly today. After today, likely the overhang would be over and the stock can gain steadily if Duty Free is steadfast in its share buyback.

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DUTY-FREE INTERNATIONAL: Aggressive buying back of shares

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