SBI Holdings to Repurchase $180 Million in Shares

SBI Holdings, the owner of Japanese retail broker SBI Securities, announced on Wednesday that it plans to buy back a number of shares over the coming months.

The announcement must be the result of shareholder discussions. Japanese law requires that any share buy-backs be agreed with shareholders in advance.

It also requires the details of a share buy-back to be published by a company - hence SBI Holdings’ announcement.

The buy-back programme itself will start next week - on November 28 - and continue until mid-February of next year.

SBI Holdings will be only be buying back common stock, and the company will be repurchasing up to eight million shares. That is equivalent to 3.39 percent of total issued shares outstanding - excluding the company’s treasury shares.

In terms of monetary costs, the firm is going to spend up to 20 billion yen ($180 million) on the share buy-back. All of the transactions will be carried via the Tokyo Stock Exchange.

Poor stock market, lower SBI Holdings share-price

In the statement it released on Wednesday, SBI Holdings gave some reasons as to why it is buying back company shares.

Essentially, the company wants to meet its pre-defined shareholder return ratio. According to the company, it has been unable to meet that ratio due to a weak stock market.

That weak stock market has left SBI Holdings with a declining share price and that, in turn, looks to have prevented the company from meeting its desired shareholder return ratio.

“After due consideration of the recent weak condition of the stock market and [SBI Holding’s] current share price performance, the Company has resolved to conduct the share repurchase to improve capital efficiency,” the company said in a statement.

“The Company endeavors to achieve a total shareholders return ratio, which is calculated by the sum of dividend payouts and share repurchase costs, of 40% as a minimum for the current fiscal year.”