Does buyback mean shares undervalued?

Companies which have been actively repurchasing their shares up till this month include DIALOG GROUP BHD [], IGB Corp Bhd, MULTI-PURPOSE HOLDINGS BHD [], QL RESOURCES BHD [] and YTL Corp Bhd.

Analysts said generally, a company would buy back its shares to boost the stock price if it perceived its securities as undervalued. Share buybacks could also be an indication of planned corporate exercises by a company.

TA Securities Holdings Bhd head of research Kaladher Govindan said any such move stemmed from management’s perception that their shares were undervalued. “Share buybacks are also intended to support their share prices,” he said.

Does buyback mean shares undervalued?

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