Select Page

Following announcement of share buyback scheme, Trustco makes a remarkable recovery

Following announcement of share buyback scheme, Trustco makes a remarkable recovery

Shares of Trustco Group Holdings Ltd have staged a dramatic comeback since the company announced at the end of March that it will start a closed buyback programme as of 01 April 2020.

Trustco shares hit an all-time low of N$1.79 on Wednesday 25 March. Short sellers were exploiting the share’s demise, with bids as low as N$1.40 offered daily. This effectively relegated the Trustco share to a penny stock.

The share started its meteoric decline on 01 October last year after trading at N$10.45 the previous day, 30 September which also marked the end of the quarter. When the share hit N$1.79 at the end of March, the company’s market capitalisation had been more than halved, falling to just above N$3 billion.

On 31 March, Trustco announced in a SENS that it will repurchase a maximum of 194 million shares and 52 million through Trustco subsidiaries. The buyback started at the beginning of April and will be concluded by 30 June, also the date Trustco indicated to publish its financial information for the period ended 31 March 2020.

The Trustco share recouped some of its lost value in the few days before the repurchase announcement, but the movement was not spectacular. It was only from 03 April that interest in the share flared, pushing the price to N$4.20 this week Wednesday. This was, however, for a single deal and the share settled at N$4.15 and then at N$3.99 later in the day.

At these values, Trustco shares have increased in value by almost 56%, of which 40% happened only in the last week. It has also pushed the company’s market capitalisation back to above N$6 billion.

“The repurchase will be effected in accordance with the Listings Requirements of the JSE Limited and the general authority to repurchase shares granted by Trustco shareholders at the annual general meeting held on 12 September 2019. Accordingly, any repurchase of shares may not be executed at a price greater than 10% above the weighted average trading price for Trustco shares for the five business days immediately preceding the date on which any such repurchase is affected,” Trustco stated in the 31 March SENS.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at https://economist.com.na. His editorial focus is on economic analysis based on budget analysis, dissecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]