When a company buyback its shares. All shares bought back will affect firstly the share premium account and retained income (B/S Account). These shares will then be recorded as unissued or cancelled in term of the article of association of the company. So technically there is less number of share floating around , based on demand and supply theory a higher price will be taken by the seller if there is less shares in the market. Similarly when a comapny issue more shares, the company retained income will increase, share premium account will increase and because there is so much shares in the market , the price will generally drop cos if one buyer do not want to sell , you can alway buy it from another buyer at a lesser price. Hope this help Preston
No , share buyback and new share allocation is totally independent from one another and should not be confused. If the company want to issue more shares, it need to comply with the requirement of the company act and permission must be obtain in term of general and specific resolution ........ Only once it is satisfy can the company place new share onto the market. Share buyback is basically at market price. Normal bid applies
The obvious answer is that they want to fund acquisitions with paper ie. issue additional shares hence the proposed increase in authorised but unissued share capital. They are trading under cautionary at the moment. This is not necessarily negative to existing shareholders but depends on the quality of acquired assets and the value they place on their own shares.