INVESTIGATING CERTAIN SHARE BUYBACK
TRANSACTIONS BY COMPANIES LISTED ON THE
JOHANNESBURG STOCK EXCHANGE FOR THE PERIOD
2000 TO 2005
André de Goede
Research report
presented in partial fulfilment
of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch
Supervisor: Prof. W.D. Hamman
Degree of confidentiality: A
December 2007
ii
Declaration
Hereby I, André de Goede, declare that this research report is my own original work and that all
sources have been accurately reported and acknowledged, and that this document, in its entirety or
in part, has not previously been submitted at any university in order to obtain an academic
qualification.
A. de Goede
30 June 2007
iii
Acknowledgements
I would like to extend my sincere gratitude and appreciation to each individual who has
contributed in some manner to the completion of this exploratory empirical study.
A special thank you to my supervisor, Professor Willie Hamman, who kept me on track with
clear, constructive feedback that paved the way towards the final product of my many hours of
research. It was a privilege to work with him on this study.
Thank you to my wife, Ciska, who has always been very patient and supportive. A further thank
you goes to my two sons, André and Christian. I pray that I may attend your graduation
ceremonies one day.
Finally, I thank the director, lecturers, supporting staff and co-students of the University of
Stellenbosch Business School for their friendship and guidance, and for impacting my life for the
better, forever.
iv
Abstract
Prior to 30 June 1999 companies in South Africa were not allowed to buy back their own shares.
Amendments to the Companies Act, the Companies Amendment Act (Act 37 of 1999) radically
changed the philosophy around capital maintenance. The result of this amendment is that a
company is allowed to buy back its own shares and finance the backbuying of its shares under
certain circumstances.
A sample of 140 companies listed on the Johannesburg Securities Exchange for the period 2000 to
2005 was selected. The backbuying of shares by the relevant company, subsidiary and trust was
analysed for the period 2000 to 2005. For the purposes of this empirical study, the financial
sector, as well as the alternative exchange, that is focussed on good quality small and mediumsized high growth companies, were excluded during sample selection.
The outcome of this exploratory study is the identification of the fact that a share buyback took
place or not in Tables 4.1 and 4.2; a summary of the number of shares bought back in Table 4.3;
and, in Table 4.4, a summary of the number of shares bought back, expressed as a percentage of
the weighted average number of shares in issue.
v
Opsomming
Maatskappye in Suid-Afrika was voor 30 Junie 1999 deur die Maatskappywet verbied om hul eie
aandele terug te koop. Wysigings aan die Maatskappywet, naamlik die Wysigingswet op
Maatskappye (wet 37 van 1999) het ’n radikale verandering bewerkstellig in die filosofie rakende
kapitaalinstandhouding. Die gevolg van dié wysigingswetgewing is dat maatskappye sedert 30
Junie 1999 hul eie aandele kan terugkoop en in sekere omstandighede die aankoop van hul eie
aandele finansier.
’n Steekproef van 140 genoteerde maatskappye op die Johannesburgse Aandelebeurs is
geselekteer vir die tydperk 2000 tot 2005. Die terugkooptransaksies van aandele deur die betrokke
maatskappy, filiaal en trust is opgesom vir die tydperk 2000 tot 2005. Hierdie empiriese
ondersoek het die finansiële sektor, asook die alternatiewe beurs van die Johannesburgse
Aandelebeurs, wat fokus op goeie kwaliteit klein en mediumgrootte maatskappye met groot
groeipotensiaal, tydens die steekproefseleksie uitgesluit.
Die resultate van hierdie empiriese ondersoek is die identifisering en opsomming van die
terugkooptransaksies van aandele vir die steekproef in Tabelle 4.1 en 4.2; ’n opsomming in Tabel
4.3 van die getal aandele teruggekoop; en ’n opsomming in Tabel 4.4 van die getal aandele
teruggekoop, uitgedruk as ’n persentasie van die gemiddelde getal uitgereikte aandele.
vi
TABLE OF CONTENTS
Declaration
ii
Acknowledgements
iii
Abstract
iv
Opsomming
v
List of tables
viii
CHAPTER 1: INTRODUCTION AND STATEMENT OF THE PROBLEM
1
1.1
Introduction
1
1.2
Problem statement
2
1.3
Layout of the study
6
CHAPTER 2: REVIEW OF RELATED LITERATURE
8
2.1
8
The motivations for share buybacks
2.1.1 An indication to the market that shares are undervalued
9
2.1.2 Altering capital structure
11
2.1.3 Counteracting dilution from share options
14
2.1.4 Releasing free cash flow
15
2.2
The golden rule of share buybacks
17
2.3
The advantages and disadvantages of share backbuying
18
CHAPTER 3: REGULATING THE BACKBUYING OF SHARES
21
3.1
Definition of terms
21
3.2
The 1999 Companies Amendment Act (Act 37 of 1999)
23
3.3
The Johannesburg Securities Exchange (JSE) Listing Requirements
23
3.3.1 Procedural requirements of the Securities Exchange News Service
26
3.4
28
The Income Tax Act (Act 58 of 1962)
3.4.1 Dividends defined
28
3.4.2 Dividends paid
30
3.4.3 Secondary tax on companies (STC)
30
3.4.4 Reductions and redemption of share capital
31
3.4.5 The provisos
34
vii
CHAPTER 4: RESULTS OF THE EMPIRICAL STUDY
39
4.1
Identification of buybacks 0, 1 and 2
39
4.2
Number of shares bought back
42
4.3
Number of shares repurchased, expressed as a percentage of the weighted average
number of shares in issue
42
CHAPTER 5: SUMMARY AND CONCLUSION
58
LIST OF SOURCES
60
APPENDIX
64
INDEX OF APPENDIX
65
viii
LIST OF TABLES
TABLE 3. 1: SHARE BUYBACKS
28
TABLE 4.1: BUYBACKS 0, 1 AND 2
40
TABLE 4.2: BUYBACKS PER ANNUM FROM 2000 TO 2005
41
TABLE 4.3: NUMBER OF SHARES IN BUYBACK
42
TABLE 4.4: NUMBER OF SHARES AS % OF WEIGHTED AVERAGE > 20%
43
TABLE 4.5: IDENTIFICATION OF BUYBACKS 0, 1 AND 2
45
TABLE 4.6: NUMBER OF SHARES BOUGHT BACK
49
TABLE 4.7: NUMBER OF SHARES REPURCHASED EXPRESSED AS A % OF
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES IN ISSUE
54
CHAPTER 1
INTRODUCTION AND STATEMENT OF THE PROBLEM
1.1 Introduction
A share buyback is a decision by which a company buys back its own shares in the
marketplace, reducing the number of the company’s issued shares. A general share
buyback occurs when the company buys back shares from shareholders in the market
place. The offer is open to all the shareholders. In a specific buyback, on the other hand,
the company buys back shares from specific or defined shareholders. A share buyback is
usually an indication that the company's management believe that the shares are
undervalued. A share buyback reduces the number of issued shares, increases earnings per
share, and tends to elevate the market value of the remaining shares.
Globally the backbuying of shares by companies is an important and popular corporate
finance tool. Share backbuying became increasingly popular during the early 1980’s in the
United States and the number of share buybacks has increased rapidly since. During 1999
a total of 1 252 companies listed on the New York Stock Exchange (NYSE) bought back a
portion of their own shares. The amounts spent in 1999 on share backbuying (estimated at
US$ 181 billion) was almost as much as the amount that NYSE listed companies
distributed as dividends (estimated at US$ 216 billion) during 1999 (Pettit, 2001). United
States companies, including the NYSE registered companies, distributed more cash to
investors in 1998 through share buybacks than through cash dividends (Grullon &
Ikenberry, 2000).
Share backbuying became popular in countries outside the United States of America
2
(USA) like Germany, the United Kingdom, Japan, Taiwan and Canada during the 1990’s.
In the USA there are two broad types of share buybacks, being the tender offer and
secondly an open-market buyback. In South Africa the Companies Amendment Act (Act
37 of 1999) and the Johannesburg Securities Exchange regulations allow for open market
share buybacks under a general authority; and for share buybacks from specifically named
shareholders under a specific authority approved by the shareholders.
In the South African context share backbuying has only been allowed since 30 June 1999
as directed by the 1999 Companies Amendment Act (Act 37 of 1999). The 1999
Companies Amendment Act dramatically changed the capital maintenance rules. The new
sections permit a company to acquire its own shares, provided that the articles of
association authorise it, and the members of the company approve of it by special
resolution. The new sections of the Act introduced the modern dual test of solvency and
liquidity in the place of the old obsolete, nineteenth-century concept of capital
maintenance.
1.2 Problem statement
In the USA, and a number of overseas countries, databases exist where the details of the
share buybacks of companies of that country are documented. Students researching share
buybacks in for example the USA, therefore start with an existing database. Obviously in
this instance the student will have no need to create a database. Such students can then
proceed immediately to perform the standard tests on buybacks, for example a comparison
between the magnitude of cash dividends paid versus the magnitude of share buybacks,
calculation of the returns during the period of announcements, and also to calculate the
returns over longer periods on a "buy and hold" basis.
3
In South Africa no database exists reflecting details of the share buybacks of companies
listed on the Johannesburg Securities Exchange (JSE). It was therefore decided by The
Graduate School of Business of the University of Stellenbosch to create its own database.
Such a database can be compiled in more than one way. The first two methods can be
regarded as rather quick methods, whilst the last two methods will be much more time
consuming and complex. Unless the researcher is only interested in a once off research
project (like a study project for an MBA student) the serious researcher should give
preference to methods three and four. The following paragraphs will discuss the four
methods to compile a database relating to share buybacks.
Firstly, open market share buyback announcements reported by companies listed on the
JSE could be investigated as done by Bhana (2007). The announcements refer to the
intention to repurchase and not to the actual buyback. In his study Bhana considered all
open market share buyback announcements regardless of whether the buyback
programmes were completed or not. Bhana further included 117 share buyback
announcements in the final sample of his investigation, without giving details of the 117
share buyback announcements.
Secondly, in South Africa there is a requirement that as soon as 3% of the total shares
have been repurchased, an announcement to that effect must be made. As a result of a
need to disseminate relevant company information to the market on a real time basis, the
JSE has established an office called the Securities Exchange News Service (SENS). All
relevant company information received by SENS is electronically transmitted to the SENS
4
subscribers. SENS facilitates early, equal and wide dissemination of relevant company
information, and improves communication between applicant issuers and the market.
Any share buyback must be announced when an aggregate of 3% of the initial number of
the relevant class of share has been purchased, redeemed or cancelled, and for each 3% in
aggregate of the initial number of that class acquired thereafter. Such announcement must
be made as soon as possible and in any event by no later than 08h30 on the business day
following the day on which the relevant threshold is reached or exceeded and must
contain the following information:

the date(s) of repurchase(s) of securities;

the highest and lowest prices paid for securities so repurchased;

the number and value of securities repurchased;

the extent of the authority outstanding by number and percentage (calculated using the

number of shares in issue before any repurchases were effected);

a statement as to the source of funds utilised;

a statement by the directors that after considering the effect of such repurchase the:
- company and the group will be able in the ordinary course of business to pay its
debts for a period of 12 months after the date of the announcement;
- assets of the company and the group will be in excess of the liabilities of the
company and the group for a period of 12 months after the date of the
announcement;
- share capital and reserves of the company and the group will be adequate for
ordinary business purposes for a period of 12 months after the date of the
announcement; and
- working capital of the company and the group will be adequate for ordinary
business purposes for a period of 12 months after the date of the announcement;
5

a statement confirming that paragraph 5.72 (a) of the JSE Listing Requirements has
been complied with;

the effect on earnings per share, headline earnings per share, net asset value per share,
net tangible asset value per share and, if applicable, diluted earnings and headline
earnings per share; and

the date on which the securities will be cancelled and the listing terminated, if
applicable.
A database of the 3% SENS announcement will therefore reflect actual share buybacks.
A report by Daly (2002) concluded that there was no significant market reaction to the
announcement of a share buyback. Daly analysed the share returns of JSE listed
companies for 88 announcements of open market share buybacks under a general
authority.
The third method is more cumbersome, but much more rewarding. By working through all
the Annual Reports, all the negative changes in the number of shares issued will be
documented. In South Africa negative changes might be caused by buybacks by the
company and shares then cancelled, buybacks by a subsidiary company and shares not
cancelled and thirdly according to a requirement of the Johannesburg Securities
Exchange, share trusts in certain cases, from 2004 onwards must be consolidated in the
balance sheet. Any company wishing to issue or sell shares to its directors on loan may
only do so, in terms of section 38(2)(b) of the Companies Amendment Act (Act 37 of
1999), by forming a trust, which sells shares issued to it by the company, to employees.
The intention of such arrangements is to provide shares to employees on loan account.
Many different types of such trust arrangements exist but generally the shares are acquired
6
by the trust either by means of an issue of shares by the company or by means of purchase
on the open market or from employees who terminate their services. According to the
Johannesburg Securities Exchange regulations the share issuer must, in respect of its or its
subsidiary companies schemes, summarise in its annual financial statements the number
of shares that may be utilised for purposes of the scheme at the beginning of the
accounting period, changes in such number during the accounting period and the balance
of securities available for utilisation for purposes of the scheme at the end of the
accounting period. Further to this, shares held by the issuer’s share trust, shall not exceed
20% of the company’s issued share capital. The fourth method involves the full
reconciliation of the third method with the number of shares repurchased by means of the
3% announcements, other buybacks not yet announced in the format of a 3%
announcement and consolidation of share trusts.
Method number four is the methodology that The Graduate School of Business of
Stellenbosch is aiming to follow. This is however a very ambitious target and will take
some time to complete. In this research report a sample of 140 listed companies (largely
taken from the old industrial sectors) was analysed for share buybacks for the period 2000
to 2005, based on method number three. The data relating to the balance sheet movement
of number of shares in issue were obtained from the annual reports, or copies of the
annual reports, of the 140 companies in the sample.
1.3 Layout of the study
The study is presented in five chapters.
Chapter 1 provides the introduction, the definition of terms, the problem statement, and
the plan of the study, followed by the layout of the study.
7
In Chapter 2 of this research report the review of related literature is covered. The
motivations for share backbuying are discussed. The principle that serves as a universal
yardstick for judging the rationale and attractiveness of a backbuying programme is also
defined.
Chapter 3 of the study will comment on the Companies Amendment Act (Act 37 of
1999), the Johannesburg Securities Exchange (JSE) listing requirements regulating the
backbuying of shares, and the Income Tax Act (Act 58 of 1962).
Chapter 4 of the study will comment on the results of the empirical study classified as:

0,1 or 2 categorised.

Number of shares bought back.

Number of shares bought back, expressed as a percentage of the weighted average
number of shares in issue.
Chapter 5 of this research report will summarise and conclude the study.
Appendix
An analysis of share transactions of a sample of 140 companies listed on the JSE in
view of buyback transactions from 2000 to 2005.
8
CHAPTER 2
REVIEW OF RELATED LITERATURE
2.1
The motivations for share buybacks
In a study of Chan, Ikenberry and Lee (2003: 1-18), mispricing, disgorging free cash flow and
altering capital structure are investigated as the three key economic motivations for share
buybacks. Chan, et al. (2003) conclude that although management may buy back shares for
various reasons, the evidence indicates that the primary reason for share backbuying is to
transfer wealth from short-term traders to long-term investors if management perceives share
prices to be trading below intrinsic value.
The conclusion by Chan, et al. (2003) was supported by Warren Buffet in the 1984 annual
report of Berkshire Hathaway in which he stated, “When companies with outstanding
businesses and comfortable financial positions find their shares selling far below intrinsic
value in the marketplace, no alternative action can benefit shareholders as surely as
repurchases” (Berkshire Hathaway, 1984).
There are various reasons why companies buy back their shares, such as taking advantage of
undervaluation, altering capital structure, cumulating shares for employee share option plans,
distributing excess capital and fending off takeover threats. This study will focus on
undervaluation, the altering of capital structure, dilution from share options and the release of
free cash flow.
9
2.1.1 An indication to the market that shares are undervalued
The motivation behind share buybacks most commonly discussed in finance literature is the
signalling theory. According to the signalling theory managers use share buybacks to “signal”
their optimism regarding the company’s future prospects to the market. According to Grullon
(2000) there are two versions of the “signalling” theory. Firstly, the share buyback is intended
to communicate management’s expectation of future increased profitability and cash flow.
This optimism is not shared by the market and is reflected in the share price. Secondly,
managers are not attempting to communicate new information to the market, but are stating
their disagreement with how the market is pricing the current performance of the company. In
both instances the management views the shares of the company as being undervalued. The
two versions differ over the cause of the discrepancy between share price and fair market
value. In the first instance the cause is the company’s inability to communicate the good
prospects to the market in a convincing manner. In the second instance the cause is the
market’s apparent inefficiency to accurately reflect publicly available information in the
current price of the shares.
It is generally accepted that the management of a company has a better knowledge of the true
value of the company than outside shareholders. This information “asymmetry” can result in
situations where managers have good news relating to future profitability and cash flows, but
that the share price does not reflect this information because public investors do not have
access to the information. The result could be that the share is priced below its intrinsic value.
The question could be posed how managers could communicate this positive information in a
credible way to investors. Literature suggests that managers could signal their optimism by
engaging in, for example, share buyback programmes. Millar and Rock (1985) argued that
10
managers that anticipate good earnings are more likely to distribute cash to their shareholders
through a dividend or a share buyback. Managers will commit to cash outflows because they
anticipate that future capital requirements can be financed with expected increases in future
earnings.
According to the first version of the signalling theory, companies that do a share buyback will
experience increased earnings and cash flows. A study by Vermaelen (1981) of open market
share buybacks concluded that significant increases in earnings and cash flows were observed
after buyback announcements. According to the second version of the signalling theory,
managers are signalling their disagreement with how the market is pricing the company’s
shares based on public information. A study by Chan, Ikenberry and Lee (2004: 461-479)
showed strong evidence that the undervaluation of shares is motive for companies to do share
backbuying.
Management often present undervaluation as the motivation behind the announcement of a
buyback programme. The primary reason for share backbuying is to transfer wealth from
short-term traders to long-term investors when management perceive share prices to be
trading below intrinsic value (Ikenberry & Vermaelen, 1996). The efficient market hypothesis
states that all the available information is fully reflected in the price of a share at any given
time (Fama, 1965: 58). It is to be expected, in an efficient market, that share prices will
respond in a fair, complete and unprejudiced manner. The paradox is that if the market reacts
in the short run to the announcement, the need for the backbuying is diminished. Management
is only expected to continue with the buyback programme in the event that prices do not
completely respond to what the decision makers perceive to be an under valuation of the
shares. In the event that management does a share buyback and indicates that they will not sell
11
any of their own shares, a positive signal is sent to the market that they believe in the
company’s future success. Studies regarding the result of withdrawn buyback programmes
indicate that returns subsequent to a buyback announcement tend to be lower for offerings
that were withdrawn, compared to those that proceeded (Mikkelson & Partch, 1988).
2.1.2 Altering capital structure
The determination of an optimal capital structure has been one of the most contentious issues
in the finance literature since Modigliani and Miller introduced their capital structure
irrelevance prepositions in their seminal article in 1958.
What Modigliani and Miller (1958) did not discuss in that article were the practical
applications of this theory for individual firms or how well the theory explained observed
facts, such as corporate leverage ratios and market reactions to security issues. As Miller
(1988) states:
“Scepticism about the practical force of our invariance preposition was
understandable given the almost daily reports in the financial press, then as now, of
spectacular increases in the value of firms after changes in capital structure. But the view that
capital structure is irrelevant or that “nothing matters” in corporate finance is far from what
we ever said about the real-world applications of our theoretical propositions. Looking back
now, perhaps we should have put more emphasis on the other, upbeat side of the “nothing
matters” coin: showing what doesn’t matter can also show, by implication, what does”.
There are two main theories of capital structure choice. The trade-off theory says that
companies have optimal debt-equity ratios, which they determine by trading off the benefits
of debt against its costs. In the original form of the model, the chief benefit of debt is the tax
advantage of interest deductibility. The primary costs of debt financing are those associated
12
with financial distress, particularly in the form of corporate under investment and defections
by customers and suppliers. According to the trade-off theory large, mature companies with
stable cash flows and limited opportunities for investment should have higher leverage ratios,
both to take advantage of the tax deductibility of debt and because of their lower financial
distress costs. At the other end of the spectrum, smaller companies with significant growth
opportunities should make limited use of debt to preserve their continuing ability to undertake
positive net present value (NPV) projects. Indeed, high-tech or start-up firms often have
"negative leverage," or cash balances that exceed any debt outstanding.
The main contender to the trade-off theory, which is known as the "pecking-order" theory,
suggests that actual corporate leverage ratios typically do not reflect capital structure targets,
but rather the widely observed corporate practice of financing new investments with internal
funds when possible and issuing debt rather than equity if external funds are required. In the
pecking-order model, an equity offering is typically regarded as a very expensive last resort.
The pecking-order theory is based on the premise that managers avoid issuing securities,
particularly equity, when the company is undervalued. And even if the company's stock is
currently fairly valued, the market reaction to the announcement of a new equity offering is
expected to cause the company's stock price to fall below fair value. What is the reason for the
market's negative response? According to the pecking-order model, management is reluctant
to issue underpriced equity (though often willing to issue fairly priced or overpriced equity).
Investors thus rationally interpret most management decisions to raise equity as a sign that the
firm is overvalued, at least based on management's view of the future, and the stock price
falls.
13
For those companies that are in fact overvalued when the new equity issue is announced, the
drop in price (provided it is not too large) is more of a correction in value than a real
economic cost to shareholders. However, for those companies that are fairly valued (or even
undervalued) at the time of the announcement, the negative market reaction and resulting
undervaluation will cause the existing shareholders to experience a dilution of value that is
henceforth referred to as "information costs."
Such negative market reactions and the
associated information costs are likely to be largest when the "information gap" between
management and investors is greatest, that is, in circumstances when investors have the
greatest uncertainty about either the firm's prospects and, perhaps even more important, what
management intends to do with the capital.
A company’s earnings stream is exposed to more risk when debt is increased. The result is a
reduction of the value of the company’s shares. On the other hand, an increase in debt
generally increases the expected rate of return on equity resulting in an increase in the share
price. Balancing these risks and returns will result in the optimal capital structure that
maximises the price of a company’s shares (Brigham & Ehrhardt, 2002). It is extremely
difficult to accurately identify the optimal capital structure. It is however possible to identify
the factors that influence it and to establish a target capital structure.
Share buybacks present an opportunity to change a company’s capital structure as it increases
the debt/equity ratio for underleveraged companies. The danger exists that cash-flush
companies may invest the excess cash in value destroying projects. If a company increases the
debt/equity ratio and is faced with high interest expense payments, it has less discretionary
cash to invest in value destroying projects.
14
A study by Chan, et al. (2003: 1-18) concluded that returns did not appear to be higher in
companies that had sharp declines in leverage and were possibly using a buyback to adjust
their capital structure. As a matter of fact, the benefits that may arise from the leverage
hypothesis are conditional on the backbuying actually taking place.
2.1.3 Counteracting dilution from share options
In his paper Weisbenner (1999) presents evidence that share option programmes in general
are associated with increased share buybacks and decreased earnings retention. His analysis
further suggests that large companies conduct a gradual buyback of shares to counter much of
the dilution to earning per share that results from share option grants. Share options do not
result in an outflow of funds for the company when issued, but they do later result in a cash
outflow in the form of a share buyback. This cash outflow could reduce the funds available to
finance future projects that in turn could affect future cash flow. The increased popularity of
share options would suggest share buybacks should continue to grow in spite of rising stock
prices. Rising price-earnings ratios make funding share options with bought back shares
costly and potentially unsustainable.
According to the Standard and Poor’s press release of 2005 on the top 500 USA Companies,
stock buybacks have been on the increased since 1980. This is in line with Weisbenner (1999)
who found that there was a dramatic increase in share buybacks in the period 1994 to 1996.
As share backbuying increased, the use of share-based compensation increased. The granting
of share options dilutes earnings per share as it increases the number of shares over which
earnings are divided. Earnings per share (EPS) is a widely used figure when evaluating the
performance of a company. The outstanding shares are reduced when a buyback is done. The
cash applied to buy back the shares is not deducted from earnings. The dilution of EPS as
15
result of share option grants can be reduced by an ongoing share buyback programmes
(Weisbenner, 1999: 1). Weisbenner concludes that large companies conduct gradual share
buybacks to counteract the dilution to earnings per share as a result of share option grants.
Weisbenner further presents evidence that share option programmes are generally associated
with increased share buybacks and decreased earnings retention.
2.1.4 Releasing free cash flow
Open market share buybacks document positive abnormal returns at the time of the
announcement (Vermaelen, 1981). The signalling theory and the free cash flow theory are the
most commonly accepted interpretations of this reaction. According to the signalling theory,
managers use share buybacks to “signal” their optimism regarding the company’s future
prospects to the market. According to the free cash flow theory, open market share buybacks
mitigate agency conflicts by returning free cash flow to shareholders. Managers are agents of
the shareholders of a company. Managers and shareholders each have their own interests and
there is potential for conflict regarding strategy of the company. A particular concern, as
pointed out by Jensen & Meckling (1976), is the extent to which managers allocate capital to
unprofitable activities, pursuing growth and size at the expense of profitability and value. The
conflict between growth and value maximisation results in a cost known as agency costs or
the agency costs of free cash flow. The definition of free cash flow according to Jensen (1986)
is the cash flow in excess of that required to fund all projects that have positive net present
values when discounted at the relevant cost of capital.
Share buybacks are more flexible and efficient than major leverage increasing transactions
such as debt-for-equity swaps and leveraged recapitalisations. Share buybacks do not imply
the future commitment to returning cash to shareholders that is commonly associated with
16
dividend increases. Guay and Harford (2000) demonstrated empirically that the choice
between a dividend increase and a share buyback depends on the permanence of the cash flow
shock. The post-distribution cash flows of dividend-increasing firms do not revert back to predistribution levels, whereas those of companies buying back shares tend to settle below the
pre-distribution levels. Neither the signalling theory nor the free cash flow theory explains the
surge in share buybacks in the USA during the 1990’s. During that period the number of
companies buying back shares and the monetary value of share buybacks increased
dramatically.
The free cash flow hypothesis forecasts that companies with high free cash flow will benefit
most from buying back shares. Many share buyback programmes are never concluded, some
are not even initiated (Stephens & Weisbach, 1998). An important aspect of share buybacks,
being capital market allocation which relate to the free cash flow hypothesis, was pointed out
by Grullon and Ikenberry (2000: 40). They stated that “as a central function of financial
markets is to allocate capital among competing investment opportunities, ideally, all projects
that add value should receive new capital in order to maximise wealth creation”. Companies
should return capital to shareholders when they run out of value adding investment
opportunities. The shareholders could put the capital to better use by investing in other
opportunities.
A study by Chan, et al. (2003: 1-18) concluded that there is limited support for the free cash
flow hypothesis. An important aspect of the free cash flow hypothesis is that gains from high
free cash flow companies should be linked to cases where management released cash.
17
2.2
The golden rule of share buybacks
A principle to serve as a standard of measurement for judging the motivation and
attractiveness of a share buyback may be defined as follows:
“A company should repurchase its shares only when its shares are trading below its expected
value and when no better investment opportunities are available” (Mauboussin, 2006).
The above principle is further supported by Ikenberry, Lakonishok & Vermaelen (2000), who
state that companies with high book-to-market ratios, or value shares, are more likely to have
share under-valuation, as their primary motive for share buybacks. Ikenberry, et al. (2000)
further states that managers in growth companies with relatively low book-to-market ratios
(glamour shares) are likely to buy back shares for reasons such as avoiding dilution of
earnings.
The management of a company has the responsibility to act as a sensible investor, and resort
to buying back shares only when the price per share is below the intrinsic value. Information
asymmetry, that is, the judgement that management understand the business of the company
better than other parties, puts them in the best position to exercise investment options between
a buyback and investing in other value creating projects. In a situation where the price of the
shares is below the intrinsic value, a share buyback transfers wealth from short-term traders to
long-term investors. Management has the obligation to invest surplus funds in value creating
projects, and, as a result, fund the highest return opportunities first. The extent of the under
valuation of the shares of a particular company will determine the rate of return on a share
buyback transaction.
18
A share buyback should only be considered if it provides a more attractive return than
investing in a value-creating project in the business. If, on the other hand, investing in value
creating projects cannot achieve a more attractive return than a share buyback, shareholders
should rather reinvest the cash they receive into other companies or projects, and earn a
higher return than the company is able to do.
2.3
The advantages and disadvantages of share backbuying
A share buyback could be made in the following three ways in the USA. Firstly, a public
company may buy back its own shares through a broker in the open market. Secondly, the
company could issue a tender under which it permits stockholders to send in their shares to
the company in exchange for a specified price per share. A company generally indicates that it
will buy back a specific number of shares within a particular time period. If more shares are
tendered than the company wishes to buy back, the buybacks are made on a pro rata basis.
Thirdly, the company may decide to buy back a block of shares from one large shareholder on
a negotiated basis.
There are advantages and disadvantages for both shareholders and management when share
buybacks occur, and they are as follows:
The advantages of a share buyback from the shareholder’s view are the following:

The capital gains tax rate applies to profit earned on share buybacks. A dividend
distribution on the other hand is taxed at the shareholders marginal tax rate in the USA
context. In the South Africa context dividends are taxed in the company through a
secondary tax on companies (STC), and therefore a shareholder does not pay the STC.

The shareholder has a choice to sell or not to sell his shares. The other option is to
accept a dividend and pay the tax.
19

Share buybacks can often remove a large block of shares, which is overhanging the
market and keeping the price per share down.
The disadvantages of a share buyback from the shareholder’s view are the following:

Shareholders may not be indifferent between the choice of dividends and capital gains
and the price of the share may benefit more from cash dividends than from buybacks.

The shareholders that are selling may not be completely aware of all the implications of
a share buyback, or they may not have all the information regarding the earning
potential of future projects of the company.

The company may pay too high a premium for the bought back shares, to the
disadvantage of the remaining shareholders.
The advantages of a share buyback from the management’s view are the following:

Dividends are “sticky” in the short run because managements are reluctant to raise
dividends if the new dividend cannot be maintained in the future. If excess cash flow is
thought to be temporary, management will prefer to make the distribution in the form of
a share buyback rather than to declare a cash dividend that is unsustainable.

Bought back shares could be used for acquisitions or released when share options are
exercised.

In the USA, directors having a large personal shareholding will have a preference for
buybacks rather than dividends due to the tax factor.

Large-scale changes in capital structure could be effected by share buybacks.

In the event that a company needs additional funds, treasury stock could be resold in the
open market.
20
The disadvantages of a share buyback from the management’s view are the following:

The announcement of a share buyback is to some extent like announcing that
management are unable to locate good investment projects.

Share buybacks carry some legal risk. In the USA, in the event that the Revenue Service
establish that a share buyback was for tax avoidance, it could lead to penalties.

In the USA context, if it appears that the company is manipulating the price of its shares
the Security Exchange Control could raise questions. In South Africa the Johannesburg
Securities Exchange govern the activities of its members through a set of general
principles and a main body of rules and regulations, consisting of sections, schedules
and practice notes.
21
CHAPTER 3
REGULATING THE BACKBUYING OF SHARES
3.1 Definition of terms
Capitalisation awards
A capitalisation award implies a choice between a scrip dividend and a cash dividend. It
entails the free issue of more shares by the company to existing shareholders, in a certain
ratio, out of the company’s reserves. This means that a portion of the distributable or nondistributable reserves is capitalised.
Capitalisation issue
A capitalisation issue, also referred to as a bonus issue, occurs when a company considers
it desirable to convert part of its reserves into new shares. This situation typically arises
when the number of shares in issue is small in relation to the total value of the business.
This situation results in the shares being too scarce or highly priced to be easily traded.
Shareholders’ approval must be obtained by the applicant to give effect to the
capitalisation of share premium or reserves if the articles of association do not permit the
directors to do so without the necessary approval of shareholders.
Closed period
A closed period is defined by the JSE Listing Requirements (2006) as:

the date from the financial year end up to the date of the earliest publication of the
preliminary report, abridged report or provisional report;
22

the date from the expiration of the first six month period of a financial year up to the
date of publication of the interim results;

the date from the expiration of the second six month period of a financial year up to
the date of publication of the second interim results, in cases where the financial
period covers more than 12 months;

in the case of reporting on a quarterly basis, the date from the end of the quarter up to
the date of the publication of the quarterly results;

any period when an issuer is trading under a cautionary announcement.
Headline earnings per share (HEPS)
HEPS serves as an indicator of a company's profitability. HEPS represents that portion of
a company's profit allocated to each issued share.
HEPS calculated as:
=
Net income – dividends on preferred stock
____________________________________
Average issued shares
In the HEPS calculation, it is more accurate to use a weighted-average number of shares
outstanding over the reporting term, because the number of shares outstanding is subject
to change over time.
Outstanding shares
Shares, currently held by investors, including shares owned by the company's officers and
insiders. Outstanding shares is the portion of the share capital of a company that has been
subscribed for by shareholders and is described as issued capital.
23
3.2 The 1999 Companies Amendment Act (Act 37 of 1999)
The capital maintenance rule, the “English” rule, that was applied in South African
Company Law through the Companies Act (Act 61 of 1973) was replaced with the
solvency and liquidity rule, the “American” rule, by the Companies Amendment Act (Act
37 of 1999). The result of this radical change in philosophy is that a company may acquire
its own shares, finance the backbuying of its own shares under certain circumstances
(Pretorius, Delport, Havenga, & Vermaas, 1999: 124).
The 1999 Companies Amendment Act (Act 37 of 1999) dramatically changed the capital
maintenance rules. The new sections allow a company to acquire its own shares, provided
that the articles of association authorise it and the members of the company approve of it
by special resolution. The backbuying of shares is only allowed under circumstances
where there are reasonable grounds to believe that after the company has made the
payment, it will be able to pay its creditors in the normal course of business, and that the
consolidated assets of the company, fairly valued, would exceed the consolidated
liabilities of the company.
In the event that a share buyback is done in contravention to the solvency and liquidity
requirements, the directors of the company, jointly and severally, will be held liable for
any amount paid, and not recovered by the company.
3.3 The Johannesburg Securities Exchange (JSE) Listing Requirements
The JSE Ltd (“JSE”) is licensed as an exchange under The Securities Services Act (Act
36 of 2004). The JSE is a market place for the trading of financial products, and has
evolved from a traditional floor-based equities trading market to a modern securities
24
exchange providing electronic trading, clearing and settlement in equities, financial and
agricultural derivatives and other associated instruments. The JSE is a member of the
World Federation of Exchanges, that is, the global trade association for the exchange
industry.
Membership of the World Federation of Exchanges comprises 55 regulated exchanges
from all regions of the world that account for over 97% of world stock market
capitalisation, and most of its exchange-traded futures, options, listed investment funds,
and bonds.
The JSE Listing Requirements (2006) reflect the requirements and procedures that govern
the activities of its members through a set of general principles and a main body of rules
and regulations, consisting of sections, schedules and practice notes. For the purposes of
this exploratory study the following requirements, relating to section 5 of the JSE Listing
Requirements: Methods and Procedure of Bringing Securities to Listing, are worth noting:

A general buyback by a company of its shares may not in the aggregate in any one
financial year exceed 20% of the issued share capital.

A share buyback may not be made at a higher price than 10% above the weighted
average of the market value of the shares for the five days immediately preceding the
transaction.

A share buyback must be announced when an aggregate of 3% of the initial number of
the relevant class of share has been purchased, and for each 3% thereafter.
Further for the purposes of this exploratory study, the following extract, relating to section
11 of the JSE Listing Requirements: Circulars Pre-listing Statements/Prospectuses and
Announcements, is worth noting.
25
1. In the event of a specific buyback the announcement must include the following:
a.
Terms of the buyback;
b.
Date of the meeting at which specific authority will be sought;
c.
The name of the shareholder and the current shareholding;
d.
The date of the buyback and the date on which the shares will be “cancelled”;
e.
The effect on EPS and headline EPS, as well as on net asset value per share;
f.
A statement that a circular with the details above will be distributed to
shareholders.
2. In the event of a company wanting general authority to buy back shares, a circular
must be distributed to shareholders to include the following:
a.
Contents of all circulars;
b.
General information like directors, major shareholders and share capital of the
company;
c.
A statement by the board of directors regarding intention to utilise the
authority;
d.
A statement by directors indicating that after the buyback:
i.
The company will be able to service its debt;
ii.
The assets of the group will exceed the liabilities;
iii.
Share capital and reserves will be adequate to do business.
There is no limit to the number of shares that can be bought back under specific authority in
terms of the JSE Listing Requirements. Under a general authority the JSE Listing
Requirements sets a limit of 20% per annum on the issued share capital. A subsidiary is
limited to buyback 10% of the issued share capital of the holding company. This is a
requirement of Section 89 of the Companies Amendment Act (Act 37 of 1999).
26
3.3.1 Procedural requirements of the Securities Exchange News Service
3.3.1.1 Introduction
As a result of a need to disseminate relevant company information to the market on a real time
basis, the JSE has established an office called the Securities Exchange News Service (SENS).
All relevant company information received by SENS will, after authentication and JSE
approval, be electronically transmitted to the SENS subscribers, which include the major wire
services, who will immediately disseminate such information to their customers. SENS
facilitates early, equal and wide dissemination of relevant company information, and
improves communication between applicant issuers and the market.
3.3.1.2 JSE approval
All announcements in terms of the JSE Listings Requirements (2006) require JSE approval
(including material price sensitive announcements). Announcements relating to quarterly
reports, interim reports, provisional reports, preliminary reports and abridged annual financial
statements, do not require JSE approval prior to publication (except where such an
announcement includes details of a corporate action, in which event the announcement or
relevant extract of the announcement will require JSE approval). All other price sensitive
announcements (not required to be made in terms of the JSE Listings Requirements (2006))
will be reviewed by the JSE before publication, and may require JSE approval where the JSE
deems this to be appropriate including any changes that the JSE deems necessary. Circulars
and pre-listing statements/prospectuses may not be sent to shareholders until they have been
approved by the JSE.
27
3.3.1.3 Timely submission of relevant company information
The timeous submission of company information is important for the functioning of the JSE.
According to the JSE Listings Requirements (2006) all relevant company information, being
company announcements and price sensitive company releases, must be submitted to SENS as
soon as possible after authorisation by the applicant issuer. In order to promote the equal
release of such information and confidentiality prior thereto, applicant issuers may not release
such information to any third party, which includes, inter alia, analysts, the media and
printers who have not signed a confidentiality agreement with applicant issuers:

during JSE trading hours, until such information has been published through SENS or

outside JSE trading hours, until such information has been authenticated, approved by
the JSE , and arrangements have been made for such information to be published
through SENS prior to the next opening of JSE trading hours.
If a company intends to release price sensitive information at a shareholders' meeting to be
held during JSE trading hours, arrangements should be made for notification of such
information to SENS, so that the release of such information at the meeting is made at the
same time as such information is published through SENS. If any other price sensitive
information is released during such meeting (e.g. during question time), immediate steps
should be taken for an appropriate company announcement or release to be published through
SENS.
3.3.1.4 Timetables applicable to all corporate actions
As indicated in Table 3.1, below, the declaration data must be published and the circular be
made available 20 days prior to the share buyback. Table 3.1 further indicates the sequence of
events moving up to the day of the buyback.
28
TABLE 3. 1: SHARE BUYBACKS
Day
Event
D-20
Declaration data published and circular must
Declaration date
be made available
All documentation must have been submitted
to and approved by the JSE
Offer to purchase shares opens
D-10
Finalisation date
Publication of finalisation information
D-5
Last day to trade
Last day to trade
D-4
List day
Securities starts trading ex rights
"Friday" D + 0
Record date
Record date
Closing date of offer
D+1
Pay date
Payment of cash. Balance of share certificates posted
if applicable
Accounts at CSDP1 updated. Results announcement
D+2
Cancellation of shares if applicable
Source: The JSE Listings Requirements (2006).
3.4 The Income Tax Act (Act 58 of 1962)
In the South African context, income tax is levied in terms of a statute known as the
Income Tax Act that is divided into 112 sections and 9 schedules. The current act in
force is the Income Tax Act (Act 58 of 1962) as amended from the Income Tax Act (Act
28 of 1914), first introduced in 1914.
3.4.1 Dividends defined
According to Huxham and Haupt (2007), dividend means any amount distributed by a
company to its shareholders (with certain exceptions). A specific inclusion in the
definition of dividend, that is relevant to this empirical study, is the reduction and
redemption of share capital and share buybacks. An example of a specific exclusion
from the definition of dividend is the reduction of share premium.
1
CSDP = Central Securities Depository Participant
29
The dividend definition contains two provisos, being:

Capitalisation issues made on or after 1 January 1974.

Transfers from the share premium account to reserves.
The dividend definition is best understood if the underlying objective is understood,
being the treatment of any profits distributed by a company to its shareholders as a
dividend.
Definition of dividend
As indicated previously, dividend means any amount distributed by a company to its
shareholders or any amount distributed out of the assets of a company to its
shareholders (Huxham & Haupt, 2007: 261).
It is important to note that the term amount distributed must refer to amounts that can
legally be distributed in terms of company law. According to the Companies
Amendment Act (Act 37 of 1999) dividends may only be distributed out of accumulated
profits and may not be distributed out of contributed share capital, share premium or the
capital redemption reserve fund. A company that only has share capital and no reserves
cannot legally distribute a dividend to its shareholders. The distribution of revenue
reserves cannot be treated as a dividend without having regard to the overall position of
the company. For example, if a company with share capital of R5 000, revenue reserves
of R10 000 and capital losses of R12 000 is liquidated, there can be no dividend because
the company does not have distributable reserves. It has revenue reserves of R10 000
but the overall position is an accumulated loss of R2 000 (R10 000 – R12 000).
30
3.4.2 Dividends paid
A close corporation does not declare dividends to its members in the same way as a
company. The definition of dividend in the Income Tax Act (Act 58 of 1962) refers to
any amount distributed by a company to its shareholders. The definition of company in
the Income Tax Act (Act 58 of 1962) includes a close corporation. The definition of
shareholder in the Income Tax Act (Act 58 of 1962) includes a member of a close
corporation. The result is that any distribution of profits by a close corporation to its
members constitutes a dividend for the purposes of the Income Tax Act (Act 58 of
1962). These profit distributions, being a dividend as defined, are exempt from tax in
the hands of the members.
In terms of the Income Tax Act (Act 58 of 1962), a tax called Secondary Tax on
Companies is currently payable at a rate of l2,5% on any dividend declared by a
company. A close corporation does not formally declare dividends in a legal sense but
the Income Tax Act (Act 58 of 1962) deems a declaration to have taken place when
any cash or assets are transferred or distributed to the members and such distribution
falls within the ambit of the dividend definition. Distributions of profits by a close
corporation to its members are therefore a dividend declared for the purposes of the
Income Tax Act (Act 58 of 1962) and are subject to secondary tax on companies.
3.4.3 Secondary tax on companies (STC)
Secondary tax on companies was introduced in 1993 in conjunction with a reduction
in the company rate of tax and has as its principal objective the encouragement of
companies to adopt a modest dividend distribution policy. STC is a tax on the
company and is not a withholding tax on dividends. A company wishing to declare a
31
dividend therefore has to take the STC into account in determining the amount to be
paid as a dividend, for example if a company has retained income of R112 500, it is
not able to declare a dividend of R112 500 because there would then be no retained
income against which the STC could be charged. The maximum dividend that such a
company could declare is R100 000 (i.e. R112 500 x 100/112,5). The remaining
amount of R12 500 (R100 000 x 12,5%) is payable to the Revenue Service as STC. In
a situation where a company does not intend declaring all of its profits as a dividend,
this problem does not arise if there is sufficient retained income to meet the STC
liability. A company with retained income of R112 500 could decide to declare a
dividend of, say, R50 000. The STC payable would then be R6 250 (R50 000 x
12,5%).
The intention of the Legislature with the introduction of STC is to benefit companies
that have a conservative dividend policy and to encourage the withholding of profits to
enhance the possibility of future growth and perhaps the ability to increase
employment.
3.4.4 Reductions and redemption of share capital
In the event of the partial reduction or redemption of the capital of a company the
amount distributed means, according to the Income Tax Act (Act 58 of 1962), so
much of the sum of any cash and the value of any asset given to a shareholder as
exceeds the cash equivalent of:

the amount by which the nominal value of the shares of that shareholder is
reduced; or

the nominal value of the shares so acquired from such shareholder, as the case
32
may be.
An unrealised profit is treated as a dividend in that it refers to the value of any asset
given to a shareholder. The Income Tax Act (Act 58 of 1962) applies to buybacks and
the reduction or redemption of the capital of a company. The capital of a company
includes both share capital and share premium. This act therefore also applies when
share premium is reduced.
Example
This example illustrates the dividend aspect of a reduction of capital. The effects of STC
and capital gains tax have therefore been ignored.
Balance Sheet - A (Pty) Ltd
Share capital
R 50 000
Cash
R 30 000
R 60 000
Assets
R 80 000
(50 000 ordinary shares @ R1)
Revenue reserves
(Market value R l50 000)
Total

R110 000
R110 000
If the company buys back 10% of its shares and pays R1 per share, there is no
dividend because the amount paid is equal to the nominal value of the shares
repurchased.

If the company buys back 10% of its shares at a cost of R5 per share, the premium
on the buyback is funded by means of utilising retained income. The result is that
cash is reduced by R25 000 (5 000 shares @ R5), share capital is reduced by R5 000
33
and retained income is reduced by R20 000. Of the R25 000 paid to shareholders
R20 000 is a dividend because this is the amount by which the cash given to the
shareholder (R25 000) exceeds the nominal value of the shares repurchased
(R5 000).

If the company reduces its shares to shares having a nominal value of 50c, and gives
an asset, with a book value of R25 000 and a market value of R40 000, to the
shareholder, the dividend is Rl5 000, being the excess of the value of the asset given
to the shareholder (R40 000) over the nominal value of the reduction (R25 000).
Share buybacks and share capital reductions have no capital gains tax (CGT)
implications for the company. If the company distributes assets there may be a CGT
implication. The shareholder does have a CGT effect.
Shares received as a dividend
According to the Income Tax Act (Act 58 of 1962), the amount distributed means in the
event of the reduction of the capital of a company pursuant to that company acquiring
its own shares by means of a distribution from any other company (such as from a
subsidiary), the amount of any reduction of the profits of that company as were
available for distribution to shareholders.
A company cannot hold shares in itself. Therefore when it receives a dividend of its
own shares from another company (such as from a subsidiary), it has to cancel the
shares as issued shares and restore them to the status of authorised, unissued share
capital. If it reduces its profits or reserves in the process, this reduction is defined as a
dividend.
34
Example
Company A holds all the shares in Company B. Company B buys 10% of the shares in
Company A for R3 million, funding the purchase out of reserves. Company B
distributes the shares to Company A as a dividend.
The amount of the dividend received by Company A is R3 million, being the market
value of the shares received. The journal entry in the books of Company A is:
Debit
Shares
Credit
R3 million
Dividend received
R3 million
When Company A cancels the shares, its share capital and reserves are reduced by R3
million. This is the amount of the dividend.
3.4.5 The provisos
The dividend definition contains two provisos of which the first is the most important.
First proviso
This proviso is aimed at overcoming a potential loophole that existed when dividends
were taxable, and which is best illustrated by way of an example.
Balance Sheet - B (PTY) LTD
Share capital (ordinary)
R100 000
Reserves
R 50 000
Assets
Rl50 000
35
Total
R150 000
Total
R150 000
The dividend definition could easily have been circumvented by the simple
expedient of first capitalising the R50 000 reserves, and then reducing share capital
in terms of the Companies Amendment Act (Act 37 of 1999).
In the example the company had reserves of R50 000 that, if paid out to the
shareholders, would have fallen into paragraph (b) of the dividend definition. By
following the route outlined above the following tax effect would have arisen:

The capitalisation of the R50 000 would have been included in paragraph (b) of
the definition, but would then have been excluded in terms of paragraph (h)
(assuming that the shares are equity shares).

The reduction of share capital would not have fallen into the dividend definition
not being a distribution of profits.

The shareholder would have received R50 000 which was not a dividend and the
company would have been left with no reserves.
The proviso is aimed at preventing this 'avoidance' of the dividend definition. It does
so by deeming all capitalised profits to be profits (reserves) available for distribution.
In other words, for the purpose of income tax, profits will always remain profits,
irrespective of the form they take in the balance sheet.
If, in the example above, B (Pty) Ltd capitalised its reserves of R50 000, its balance
sheet after the capitalisation issue would be:
B (PTY) LTD
Ordinary share capital
R150 000
Assets
Rl50 000
36
No tax consequences would have arisen as a result of the capitalisation issue, but if
the company now has a reduction of share capital or a buy-back or is liquidated as a
result of which the shareholders receive R50 000, the proviso will deem the amount
paid to the shareholder to be a dividend, being a distribution of the profits previously
capitalised. If the share capital is reduced by more than R50 000, only R50 000 will
be a dividend in terms of the proviso, the balance being a return of genuine share
capital.
The first proviso applies where, on or after 1 January 1974, a company has
transferred any amount from reserves or undistributed profits to share capital, or to
the share premium account. It has the effect of deeming such capitalised profits to be
profits available for distribution. The proviso directs that the profits will retain their
nature, and that capital profits that have been capitalised will be deemed to be capital
profits available for distribution, and revenue profits capitalised will be deemed to be
revenue profits available for distribution. Note that the proviso does not apply where
the capitalisation issue has been treated as a dividend, for example, where the
capitalisation issue is of non-equity shares.
Paragraphs (iii), (iv) and (v) of the proviso then indicate under what circumstances
the deemed profits will be treated as a dividend. Paragraphs (iii) is considered below.
Reduction or redemption of share capital or a share buyback
Paragraph (iii) states that if, in the event of a partial reduction or redemption of
share capital or the reconstruction of a company (including any share buy-back), any
cash or any asset is given to shareholders, and such cash or asset represents a return
37
of share capital or a return of share premium, the amount so distributed will first be
deemed to be a distribution to shareholders of the capitalised profits. It is SARS
practice to deem first the capitalised revenue profits, and then the capitalised capital
profits to have been distributed.
Example
In 1990 when its balance sheet was as follows:
Balance Sheet - A (Pty) Ltd
Share capital
R100 000
Capital reserves
R 25 000
Revenue reserves
R 75 000
Total
R200 000
Cash
R200 000
R200 000
A (Pty) Ltd had a 1 for 1 capitalisation issue and utilised all the revenue and capital
reserves for this purpose, whereafter the balance sheet was as follows:
Share capital
R200 000
Total
R200 000
Cash
R200 000
R200 000
If the balance sheet remained unchanged and one year later the company reduced its
share capital to R120 000 and paid R80 000 to the shareholders, the amount paid
would, in terms of paragraph (iii) of the first proviso, be deemed to be R 75 000 of
revenue profits, and R5 000 of capital profits distributed to shareholders and would
be treated as a dividend. Note that the share capital will then include R20 000 of
capital profits deemed to be available for distribution. Note that a repayment of share
38
premium when there are capitalised reserves (profits) constitutes a distribution of the
capitalised profits and is deemed to be a dividend.
Example
Balance Sheet - C (Pty) Ltd
Share capital
Rl00 000
Share premium
R 50 000
Total
R150 000
Cash
R150 000
R150 000
The company capitalised R60 000 of revenue profits in 1990. If the share premium is
repaid to the shareholders, the R50 000 will be deemed to be a distribution of the
profits capitalised in 2000, and will be a dividend. Capitalised revenue profits will
then be reduced to R10 000.
39
CHAPTER 4
RESULTS OF THE EMPIRICAL STUDY
4.1 Identification of buybacks 0, 1 and 2
A sample of 140 companies listed on the Johannesburg Securities Exchange for the period
2000 to 2005 was selected. The objective of this exploratory study is to analyse, for the
140 listed companies in this sample, the following:

The balance sheet movement of the number of shares in issue. Further, identify
whether there was backbuying or not during a specific year, and finally classify results
as follows:
0 – No backbuying was made during the year.
1 – Backbuying was indeed made during the year.
2 – The company was inactive or deregistered (delisted).
The results are presented in Tables 4.1, 4.2 and 4.5.

Identify the number of shares bought back by each of the 140 companies for the period
2000 to 2005, and present the results in Tables 4.3 and 4.6.

Express the number of shares bought back as a percentage of the weighted average
number of shares in issue, for each buyback as identified in 2, and present the results
in Tables 4.4 and 4.7.
40
This exploratory study does not test the reaction of the market after the announcement of a
share buyback. The study further does not measure the return achieved of a buy-and-hold
transaction. The study excludes the financial sector, as well as the alternative exchange
that is focussed on good quality small and medium-sized high-growth companies.
From the sample of 140 companies, 73 did exercise a share buyback either through the
company, a subsidiary or the trust. This translates to a 52% participation in share
buybacks from the sample of 140 over the period 2000 to 2005. Table 4.1 below classifies
transactions, relating to share buybacks for the 140 companies in the sample, as follows:
0 – No buyback was made during the year.
1 – A buyback was indeed made during the year.
2 – The company was inactive or deregistered.
TABLE 4.1: BUYBACKS 0, 1 AND 2
No Buy Backs
Buybacks
No Activity
Total
0
1
2
2005 Company
117
6
17
140
2004 Company
128
5
7
140
2003 Company
122
16
2
140
2002 Company
134
5
1
140
2001 Company
133
7
0
140
2000 Company
131
5
4
140
2005 Subsidiary
108
15
17
140
2004 Subsidiary
113
20
7
140
2003 Subsidiary
117
21
2
140
2002 Subsidiary
123
16
1
140
2001 Subsidiary
125
15
0
140
2000 Subsidiary
127
9
4
140
2005 Trust
107
17
16
140
2004 Trust
109
24
7
140
2003 Trust
134
4
2
140
2002 Trust
136
3
1
140
2001 Trust
140
0
0
140
2000 Trust
136
0
4
140
41
Table 4.2 below, summarises the number of share buyback transactions per annum for the
company, the subsidiary and the trust respectively. The results of this empirical study
indicate a upward trend in the number of combined transactions from 2000 (14
transactions) to 2005 (38 transactions). Share buybacks have only been allowed since 30
June 1999, as directed by the 1999 Companies Amendment Act (Act 37 of 1999). The
results of the empirical study suggest that this contributed to the lower number of
buybacks in 2000.
TABLE 4.2: BUYBACKS PER ANNUM FROM 2000 TO 2005
COMPANY
2005C
2004C
2003C
2002C
2001C
2000C
117
128
122
134
133
131
1 Buybacks
6
5
16
5
7
5
2 No activity
17
7
2
1
0
4
140
140
140
140
140
140
2005S
2004S
2003S
2002S
2001S
2000S
108
113
117
123
125
127
15
20
21
16
15
9
0 No buybacks
Total
SUBSIDIARY
0 No buybacks
1 Buybacks
2 No activity
Total
17
7
2
1
0
4
140
140
140
140
140
140
2005T
2004T
2003T
2002T
2001T
2000T
TRUSTS
0 No buybacks
107
109
134
136
140
136
1 Buybacks
17
24
4
3
0
0
2 No activity
16
7
2
1
0
4
140
140
140
140
140
140
Total
COMPANY, SUBSIDIARY & TRUSTS
2005
2004
2003
2002
2001
2000
1 Buybacks
38
49
41
24
22
14
Total
38
49
41
24
22
14
Note: C as a suffix to the year, e.g. 2005C, refers to transactions in the company for
the 2005 financial year.
S as a suffix to the year, e.g. 2005S, refers to transactions in the subsidiary for the
2005 financial year.
42
T as a suffix to the year, e.g. 2005T, refers to transaction in the trust for the 2005
financial year.
4.2 Number of shares bought back
As indicated in Table 4.3 below, the results of this empirical study confirm that a total of
2 123 352 765 shares were bought back through the companies, subsidiaries and trusts.
The companies bought back 930 735 428 shares that translate to 44% of the total number
of shares bought back by the 140 companies in the sample. Subsidiaries bought back 835
987 834 shares, that translate to 39% of the total number of shares bought back by 140
companies in the sample. Trusts bought back 356 629 503 shares that translate to 17% of
the total number of shares bought back by the 140 companies in the sample.
TABLE 4.3: NUMBER OF SHARES IN BUYBACK
COMPANY
Number of shares
2005C
2004C
2003C
2002C
2001C
2000C
Total
163 736 296
142 041 880
172 195 190
90 032 801
273 324 796
89 404 465
930 735 428
2005S
2004S
2003S
2002S
2001S
2000S
Total
103 390 221
125 063 505
210 532 563
124 697 778
153 531 452
118 772 315
835 987 834
2005T
2004T
2003T
2002T
2001T
2000T
Total
98 078 325
139 638 278
94 882 698
24 030 202
0
0
356 629 503
2005
2004
2003
2002
2001
2000
Total
365 204 842
406 743 663
477 610 451
238 760 781
426 856 248
208 176 780
2 123 352 765
SUBSIDIARY
Number of shares
TRUSTS
Number of shares
COMPANY, SUBSIDIARY & TRUSTS
TOTAL
4.3 Number of shares repurchased, expressed as a percentage of the
weighted average number of shares in issue
Table 4.4 below, reflects the number of shares in the buyback, expressed as a percentage
of the weighted average number of shares in issue, where the percentage is greater than
43
20% per annum. A general buyback by a company of its shares may not exceed 20% of
the issued share capital in the aggregate in any one financial year. The instances reflected
in Table 4.4 where the percentage exceeds 20% are not analysed in this empirical study,
but identified as warranting further investigation. Distribution and Warehousing Network
bought back 58,02% (2003C) of the weighted average number of shares in issue. Onelogix
Holdings bought back 31,92% (2004C) and 26,57% (2002C) of the weighted average
number of shares in issue respectively. Southern Electricity Company bought back
54,41% (2003C) and 26,10% (2001C) of the weighted average number of shares in issue
respectively. ELB Group bought back 23,45% (2004T) of the weighted average number of
shares in issue through the trust. Global Technology bought back 21,18% (2003T) of the
weighted average number of shares in issue through the trust. Global Village Holdings
bought back 32,59% (2005T) of the weighted average number of shares in issue through
the trust.
TABLE 4.4: NUMBER OF SHARES AS % OF WEIGHTED AVERAGE > 20%
COMPANY
2005C
2004C
2003C
2002C
2001C
2000C
AECI
0,00%
0,00%
0,00%
0,00%
55,47%
0,00%
Distribution and Warehousing Network
0,00%
11,82%
58,02%
0,00%
0,00%
0,00%
Dynamic Cables RSA
0,00%
0,00%
0,00%
0,00%
38,24%
0,00%
ELB Group
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Global Village Holdings
0,00%
17,73%
0,00%
0,00%
0,00%
0,00%
Onelogix Holdings
0,00%
31,92%
0,00%
26,57%
0,00%
0,00%
Southern Electricity Company
0,00%
3,30%
54,41%
0,00%
26,10%
11,38%
Global Technology
SUBSIDIARY
2005S
2004S
2003S
2002S
2001S
2000S
AECI
0,00%
0,00%
0,00%
0,00%
11,09%
0,00%
Distribution and Warehousing Network
0,00%
0,00%
4,66%
4,26%
0,00%
0,00%
Dynamic Cables RSA
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
ELB Group
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Global Village Holdings
0,00%
8,92%
0,00%
0,00%
0,00%
0,00%
Onelogix Holdings
0,00%
0,00%
0,00%
5,01%
0,00%
0,00%
Southern Electricity Company
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Global Technology
44
TRUSTS
2005T
2004T
2003T
2002T
2001T
2000T
AECI
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Distribution and Warehousing Network
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Dynamic Cables RSA
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
ELB Group
0,00%
23,45%
0,00%
0,00%
0,00%
0,00%
21,18%
0,00%
0,00%
0,00%
Global Technology
Global Village Holdings
32,59%
0,00%
0,00%
0,00%
0,00%
0,00%
Onelogix Holdings
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
Southern Electricity Company
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
45
TABLE 4.5: IDENTIFICATION OF BUYBACKS 0, 1 AND 2
1
2
3
4
5
6
7
8
9
DESCRIPTION
Amalgamated Beverage Industries
Absolute Holdings
Adcorp Holdings
Adonis Knitwear Holdings
AECI
Afgri
African Oxygen
Afrox Healthcare
African and Overseas Enterprises
10
11
12
13
14
15
16
2005C
2004C
COMPANY
SUBSIDIARY
TRUST
2003C 2002C 2001C 2000C 2005S 2004S 2003S 2002S 2001S 2000S 2005T 2004T 2003T 2002T 2001T 2000T
0
0
0
0
2
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
1
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
AG Industries
All Joy Foods
Alliance Data Corporation
Allied Technologies
Alex White Holdings
Astral Foods
AVI
0
0
2
1
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
2
0
0
0
2
0
0
0
2
0
0
1
0
1
0
0
0
0
1
1
0
0
0
0
0
1
1
0
0
0
0
0
0
1
0
0
0
0
0
0
1
0
2
0
0
0
2
1
0
0
2
0
0
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
2
0
17
18
19
20
21
22
23
24
25
Awethu Breweries
Barloworld
Basil Read Holdings
Bearing Man
Beige Holdings
Bell Equipment
The Bidvest Group
Bowler Metcalf
Bryant Technology
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
1
2
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
1
2
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
26
27
28
29
30
31
32
Buildmax
Bytes Technology Group
Bicc Cafca
Cargo Carriers
Cashbuild
CCI
Cenmag Holdings
0
0
2
0
0
2
0
0
0
0
0
0
2
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
2
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
1
1
2
0
0
0
0
0
1
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33 City Lodge Hotels
46
34
35
36
37
38
39
Combined Motor Holdings
Command Holdings
Compu -Clearing Outsourcing
Concor
Control Instruments Group
Creditvision Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
2
1
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
1
0
0
0
0
2
0
0
0
0
0
0
0
1
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
40
41
42
43
44
45
46
47
48
Crookes Brothers
Cullinan Holdings
Cyberhost
Datatec
Distribution and Warehousing Network
Delta Electrical Industries
Dimension Data Holdings
Distell Group
DNA
0
0
0
0
0
0
0
0
2
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
49
50
51
52
53
54
55
56
57
58
59
60
61
The Don Group
Dorbyl
Dynamic Cables RSA
Edgars Consolidated Stores
ELB Group
Elixer Technology Holdings
Ellerine Holdings
EnviroServ Holdings
ERP.com Holdings
Eureka Industrial
Foschini
Global Technology
Global Village Holdings
Highveld Steel and Vanadium
Corporation
Howden Africa Holdings
Hudaco Industries
Industrial Credit Company Africa
Holdings
Idion Technology Holdings
Illovo Sugar
Indequity Group
InfoWave Holdings
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
2
1
0
1
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
2
0
0
1
0
0
0
0
0
0
1
0
1
2
1
0
0
0
1
0
0
1
0
1
0
1
0
0
0
1
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
1
2
1
0
0
0
1
1
0
1
0
0
0
1
2
0
0
0
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
2
2
1
0
0
0
2
2
0
0
0
0
2
2
0
0
0
0
62
63
64
65
66
67
68
69
70 Inmins
47
71
72
73
74
75
76
77
78
ISA Holdings
Italtile
Integrear
Interconnective Solutions
Intertrading
Jasco Electronics Holdings
Johnnic Holdings
Kagiso Media
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
79
80
81
82
83
Kairos Industrial Holdings
King Consolidated Holdings
KWV Investments
Labat Africa
Mathomo Group
0
0
0
0
0
0
0
0
0
2
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
84
85
86
87
88
89
90
91
Metair Investments
Mittal Steel South Africa
Mnet
MoneyWeb Holdings
Moribo Leisure
Moulded Medical Supplies
Mr Price Group
Mvelaphanda Group
0
0
2
0
2
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
2
1
2
0
0
0
0
0
2
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
2
0
2
0
0
1
1
0
2
1
0
0
1
1
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
92
93
94
95
96
97
98
Namibian Sea Products
Network Healthcare Holdings
New Africa
New Clicks Holdings
Nictus
Omnia Holdings
Onelogix Holdings
0
0
2
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
2
1
0
0
0
0
1
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
1
2
0
0
0
0
0
1
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
99
100
101
102
103
104
Ozz
Pals Holdings
Pasdec Resources SA
Petmin
Pinnacle Technology Holdings
Pretoria Portland Cement Company
2
0
0
0
0
0
2
0
0
0
0
0
2
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
1
0
2
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
2
0
0
0
0
0
2
1
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
105
106
107
108
Primeserv Group
Profurn
Purple Capital
Putco
0
2
0
2
0
2
0
0
0
2
1
0
1
2
0
0
0
0
0
0
0
0
1
0
0
2
0
2
1
2
0
0
1
2
0
0
0
2
0
0
1
0
0
0
0
1
0
0
1
2
0
2
1
2
0
0
0
2
0
0
0
2
0
0
0
0
0
0
0
0
0
0
48
109 Rainbow Chicken
110 Rareco
111 Relyant Retail
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
112
113
114
115
116
117
118
Reunert
Sasol
Sekunjalo Investments
Southern Electicity Company
S&J Land Holdings
Sovereign Food Investments
Spanjaard
0
0
0
0
0
0
0
1
0
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
1
1
0
0
0
0
0
0
1
0
0
0
0
0
0
1
0
0
0
0
0
1
1
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
119
120
121
122
123
124
125
Spectrum Shipping
Spur Corporation
Square OneSolutions Group
Stella Vista Technologies
Tiger Wheels
Tongaat- Huletts Group
Transpaco
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
1
0
0
0
0
1
0
1
0
0
1
0
0
0
1
0
0
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
1
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
126
127
128
129
130
131
132
133
134
Trencor
Truworths International
Unitrans
Vaalauto
Venter Leisure and Comm. Trailers
Vesta Technology Holdings
WB Holdings
WilsonBayly Holmes-Ovcon
Wesco Investments
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
2
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
2
0
0
0
0
0
0
1
1
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
135
136
137
138
139
Winhold
Woolworths Holdings
Wooltru
Yomhlaba(Zenith)
The York Timber Organisation
0
1
0
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
140
0=
1=
2=
Zaptronix
No Buy-Backs
Share Buy-back
No Activity
- Company deregistered
- Unable to source annual report
- Company not listed
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
49
TABLE 4.6: NUMBER OF SHARES BOUGHT BACK
DESCRIPTION
COMPANY
2005C
2004C
2003C
0
0
2
Amalgamated
Beverage
Industries
Absolute
Holdings
0
3
Adcorp Holdings
0
4
Adonis Knitwear
Holdings
5
AECI
6
1
SUBSIDIARY
2002C
2001C
2000C
2005S
2004S
2003S
TRUSTS
2002S
2001S
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,255,979
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
51,555,605
0
0
0
0
0
Afgri
0
0
0
0
0
14,420,700
6,194,431
1,912,245
11,870,001
11,085,158
7
African Oxygen
0
0
0
0
0
0
34,285,308
0
0
8
Afrox Healthcare
0
0
0
0
0
0
0
0
9
African and
Overseas
Enterprises
0
0
0
0
0
0
0
10
AG Industries
0
0
0
0
0
0
0
11
All Joy Foods
0
0
0
0
0
0
0
0
0
0
0
0
0
8,048,242
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,105,591
27,369,006
0
0
0
49,293,629
0
0
7,171,020
14
Alliance Data
Corporation
Allied
Technologies
Alex White
Holdings
15
Astral Foods
16
AVI
Awethu
Breweries
12
13
17
2000S
0
2005T
2004T
2003T
0
0
0
0
0
0
1,255,979
1,000,000
0
0
0
10,311,120
0
1,546,800
0
0
0
1,299,810
2002T
2001T
2000T
0
0
0
0
0
0
0
0
0
0
264,552
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,238,871
605,877
0
0
0
0
0
0
0
0
0
5,198,486
500,000
12,199,500
2,300,000
1,342,768
2,406,378
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
65,700
0
2,046,600
16,978,600
0
0
0
0
0
0
19
Barloworld
Basil Read
Holdings
0
0
0
0
0
0
245,837
0
0
0
0
0
0
0
0
0
0
0
20
Bearing Man
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
21
Beige Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
22
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
23
Bell Equipment
The Bidvest
Group
0
0
0
0
0
0
7,542,454
3,064,153
9,772,830
621,761
0
0
0
0
0
0
0
0
24
Bowler Metcalf
0
0
0
0
0
0
0
0
0
0
0
0
0
134,502
0
0
0
0
25
Bryant Tech
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
26
Buildmax
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
18
50
27
Bytes Technology
Group
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
28
Bicc Cafca
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
29
Cargo Carriers
0
0
0
0
0
0
0
0
0
0
0
0
593,710
0
0
0
0
0
30
Cashbuild
0
0
0
0
0
0
0
0
0
631,296
0
0
1,556,035
2,233,796
0
0
0
0
31
CCI
0
0
4,500,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32
Cenmag Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33
City Lodge Hotels
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5,020,627
0
1,262,400
1,563,900
0
190,243
0
1,110,527
3,227,100
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
849,000
948,750
0
0
0
0
35
Combined Motor
Holdings
Command
Holdings
36
Compu -Clearing
Outsourcing
34
37
38
Concor
Control
Instruments
Group
0
0
4,217,876
0
0
0
0
858,422
7,290,250
0
0
0
0
11,119,996
0
0
0
0
39
Creditvision
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
40
Crookes Brothers
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
41
Cullinan Holdings
0
0
0
0
50,000,000
0
0
0
0
0
0
0
0
0
0
0
0
0
42
Cyberhost
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
43
Datatec
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
44
Distribution and
Warehousing
Network
0
19,970,802
109,643,012
0
0
0
0
0
8,804,277
12,341,004
0
0
0
0
0
0
0
0
45
Delta Electrical
Industries
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
46
Dimension Data
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
47
Distell Group
0
0
0
0
0
0
0
0
0
0
0
0
933,000
201,000
0
0
0
0
48
DNA
0
0
0
0
0
0
0
0
38,692,000
0
0
0
0
0
0
0
0
0
49
The Don Group
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
50
Dorbyl
0
0
996,790
0
0
0
0
145,961
0
996,790
0
0
0
0
0
0
0
0
51
Dynamic Cables
RSA
0
0
0
0
17,043,707
0
0
0
0
0
0
0
0
0
0
0
0
0
52
Edgars
Consolidated
Stores
0
0
5,744,460
0
0
0
0
0
137,584
5,606,876
0
0
827,391
1,595,966
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
6,559,466
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
53
54
ELB Group
Elixer
Technology
Holdings
51
55
Ellerine Holdings
0
0
0
0
0
0
0
0
2,214,200
0
0
0
0
448,565
780,812
0
0
0
0
0
0
0
0
0
0
0
0
0
11,727,647
0
8,234,000
0
0
0
0
0
57
EnviroServ
Holdings
ERP.com
Holdings
0
0
0
0
0
0
2,729,801
3,854,992
674,440
0
0
0
0
0
0
0
0
0
58
Eureka Industrial
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
59
0
0
0
0
0
0
0
5,000
2,638,906
14,233,921
0
0
6,514,063
5,241,799
0
0
0
0
60
Foschini
Global
Technology
0
0
0
0
0
0
0
0
0
0
0
0
0
0
91,000,000
0
0
0
61
Global Village
Holdings
0
15,585,140
0
0
0
0
0
7,840,000
0
0
0
0
17,346,611
0
0
0
0
0
62
Highveld Steel
and Vanadium
Corporation
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
63
Howden Africa
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
64
Hudaco Industries
0
0
0
0
0
0
0
0
0
0
19,900
2,487,928
0
0
0
0
0
0
65
Industrial Credit
Company Africa
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
66
Idion Technology
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,852,739
0
0
67
Illovo Sugar
0
0
79,401
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
68
0
0
0
2,730,000
0
0
0
0
502,500
12,000
0
0
0
0
0
0
0
0
69
Indequity Group
InfoWave
Holdings
8,899,096
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
70
Inmins
0
0
5,152,756
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
71
ISA Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
72
Italtile
0
0
0
0
0
0
0
0
0
0
0
0
0
1,031,466
0
0
0
0
73
Integrear
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
74
Interconnective
Solutions
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
75
Intertrading
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
76
Jasco Electronics
Holdings
0
0
300,000
0
0
0
0
0
0
0
0
0
217,512
0
0
0
0
0
77
Johnnic Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
78
Kagiso Media
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
488,600
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
56
81
Kairos Industrial
Holdings
King
Consolidated
Holdings
KWV
Investments
82
Labat Africa
79
80
52
83
84
Mathomo Group
Metair
Investments
0
0
0
85
Mittal Steel South
Africa
0
0
0
0
0
2,357,584
0
0
0
0
0
0
0
0
0
0
0
0
86
Mnet
0
0
0
14,876,724
0
0
0
0
0
0
0
0
0
0
0
15,088,118
0
0
87
MoneyWeb
Holdings
0
0
0
0
0
0
8,850,808
6,020,076
0
0
0
0
0
947,394
0
0
0
0
88
Moribo Leisure
0
0
3,200,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
89
Moulded Medical
Supplies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
451,845
0
0
0
0
0
0
0
0
0
0
0
0
8,373,920
9,146,290
0
0
5,405,446
534,611
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
90
91
Mr Price Group
Mvelaphanda
Group
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8,725
9,050
0
0
0
0
93
Namibian Sea
Products
Network
Healthcare
Holdings
0
0
0
0
0
0
6,225,000
51,351,769
52,655,546
0
55,000,000
3,479,452
417,200
95,015,500
0
0
0
0
94
New Africa
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
95
New Clicks
Holdings
0
0
0
0
0
0
13,926,471
13,005,296
0
0
0
0
0
2,809,000
0
0
0
0
96
Nictus
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
97
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,837,334
0
0
0
98
Omnia Holdings
Onelogix
Holdings
0
88,261,190
0
48,018,785
0
0
0
0
0
9,052,815
0
0
0
0
0
0
0
0
99
Ozz
0
0
0
237,076
3,284,348
0
0
0
0
0
2,149,975
226,600
0
0
0
0
0
0
100
Pals Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
1,028,100
0
0
0
0
101
Pasdec Resources
SA
92
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,307,415
0
0
0
0
0
0
0
0
0
0
0
104
Petmin
Pinnacle Tech
Holdings
Pretoria Portland
Cement Company
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
105
Primeserv Group
0
0
0
24,170,216
0
0
0
3,569,113
5,536,592
0
15,623,296
0
1,831,922
4,726,598
0
0
0
0
106
Profurn
0
0
0
0
0
0
0
0
0
0
0
62,954,435
0
0
0
0
0
0
107
Purple Capital
0
0
7,400,000
0
0
11,980,000
0
0
0
0
0
0
0
0
0
0
0
0
108
Putco
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
109
Rainbow Chicken
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
110
Rareco
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
111
Relyant Retail
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,089,345
0
0
112
Reunert
0
17,168,229
0
0
0
0
0
1,895,573
0
0
15,622,358
1,545,700
0
0
0
0
0
0
113
Sasol
0
0
0
0
0
0
0
370,000
1,884,328
10,782,249
19,275,300
27,799,600
0
0
0
0
0
0
102
103
53
116
Sekunjalo
Investments
Southern
Electicity
Company
S&J Land
Holdings
117
Sovereign Food
Investments
114
115
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,056,519
16,115,205
0
100,885,107
59,082,281
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
33,160
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
119
Spanjaard
Spectrum
Shipping
0
0
0
0
0
0
0
0
0
0
0
0
51,000,000
0
0
0
0
0
120
Spur Corporation
0
0
0
0
0
0
5,310,000
463,790
954,512
1,825,924
923,100
0
0
0
0
0
0
0
121
Square One
Solutions Group
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
122
Stella Vista
Technologies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
123
Tiger Wheels
0
0
0
0
0
0
0
0
1,228,393
0
0
0
0
268,640
0
0
0
0
124
Tongaat- Huletts
Group
125
Transpaco
126
118
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,962,908
0
2,018,717
0
0
0
0
360,171
0
0
2,602,777
0
978,942
515,836
0
0
0
0
Trencor
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
127
Truworths
International
0
0
0
0
0
0
3,363,000
20,447,000
2,155,214
13,612,454
0
0
22,000
143,000
0
0
0
0
128
Unitrans
0
0
0
0
0
0
814,971
0
0
0
0
0
0
603,330
0
0
0
0
129
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
130
Vaalauto
Venter Leisure
and Commercial
Trailers
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
131
Vesta Technology
Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
663,690
0
0
0
0
132
WB Holdings
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
91,457,044
0
0
0
0
0
4,455,974
0
49,277,007
33,138,713
0
0
0
0
0
0
0
0
0
0
5,061,767
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
25,000,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
134
WilsonBayly
Holmes-Ovcon
Wesco
Investments
135
Winhold
136
Woolworths
Holdings
137
Wooltru
138
Yomhlaba(Zenith)
139
The York Timber
Organisation
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
140
Zaptronix
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
163,736,296
142,041,880
172,195,190
90,032,801
273,324,796
89,404,465
103,390,221
125,063,505
210,532,563
124,697,778
153,531,452
118,772,315
98,078,325
139,638,278
94,882,698
24,030,202
0
0
133
54
TABLE 4.7: NUMBER OF SHARES REPURCHASED EXPRESSED AS A % OF WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES IN ISSUE
DESCRIPTION
2005
2004
COMPANY
2003
2002
2001
2000
2005
2004
SUBSIDIARY
2003
2002
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Amalgamated Beverage
Industries
Absolute Holdings
Adcorp Holdings
Adonis Knitwear Holdings
AECI
Afgri
African Oxygen
Afrox Healthcare
African and Overseas Ent
AG Industries
All Joy Foods
Alliance Data Corporation
Allied Technologies
Alex White Holdings
Astral Foods
AVI
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
8.10%
0,00%
0,00%
8.78%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.64%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
17
18
19
20
21
22
23
24
25
Awethu Breweries
Barloworld
Basil Read Holdings
Bearing Man
Beige Holdings
Bell Equipment
The Bidvest Group
Bowler Metcalf
Bryant Technology
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
26
27
28
29
30
31
32
Buildmax
Bytes Technology Group
Bicc Cafca
Cargo Carriers
Cashbuild
CCI
Cenmag Holdings
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
33
City Lodge Hotels
0,00%
2001
2000
2005
2004
TRUSTS
2003
2002
2001
2000
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
55.47%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
13.68%
0,00%
0,00%
0,00%
0,00%
0,00%
4.31%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.87%
10.25%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.08%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.58%
0,00%
0,00%
0,00%
0.67%
0,00%
0,00%
0,00%
0,00%
2.98%
2.27%
0,00%
0,00%
0,00%
0,00%
0,00%
3.62%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.42%
1.62%
0,00%
0,00%
0,00%
0,00%
0,00%
3.28%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.16%
0,00%
0,00%
3.10%
0,00%
11.09%
0.48%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
3.38%
0,00%
0,00%
2.54%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.69%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.43%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.76%
0,00%
0,00%
0.66%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.45%
0,00%
0,00%
0,00%
2.49%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.02%
0,00%
0,00%
0,00%
0.03%
0,00%
0,00%
0,00%
0,00%
3.17%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.21%
0,00%
0,00%
0,00%
1.05%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
8.26%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.15%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.31%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
2.76%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
3.06%
7.10%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.40%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
55
34
35
36
37
38
39
Combined Motor Holdings
Command Holdings
Compu -Clearing
Concor
Control Instruments Group
Creditvision Holdings
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
11.48%
0,00%
5.37%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
2.88%
0,00%
0,00%
0,00%
0,00%
0,00%
3.28%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.50%
0,00%
1.31%
0,00%
0,00%
0,00%
0,00%
0,00%
9.29%
0,00%
0,00%
0,00%
2.67%
0,00%
0,00%
0,00%
0,00%
0,00%
7.36%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
7.34%
0,00%
0,00%
0,00%
0,00%
0,00%
7.11%
17.01%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
40
41
42
43
Crookes Brothers
Cullinan Holdings
Cyberhost
Datatec
Distribution and
Warehousing Network
Delta Electrical Industries
Dimension Data Holdings
Distell Group
DNA
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
7.30%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
11.82%
0,00%
0,00%
0,00%
0,00%
58.02%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4.66%
0,00%
0,00%
0,00%
6.06%
4.26%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.48%
0,00%
0,00%
0,00%
0,00%
0.10%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
The Don Group
Dorbyl
Dynamic Cables RSA
Edgars Consolidated Stores
ELB Group
Elixer Technology Holdings
Ellerine Holdings
EnviroServ Holdings
ERP.com Holdings
Eureka Industrial
Foschini
Global Technology
Global Village Holdings
Highveld Steel and
Vanadium Corporation
Howden Africa Holdings
Hudaco Industries
Industrial Credit Company
Africa Holdings
Idion Technology Holdings
Illovo Sugar
Indequity Group
InfoWave Holdings
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
17.73%
0,00%
3.01%
0,00%
11.41%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
38.24%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.63%
0,00%
0,00%
0,00%
0,00%
0,00%
0.44%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
2.31%
0,00%
0,00%
0,00%
8.92%
0,00%
0,00%
0,00%
0.27%
0,00%
0,00%
3.07%
0,00%
0.41%
0,00%
1.17%
0,00%
0,00%
0,00%
2.96%
0,00%
9.89%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
6.16%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.56%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.79%
0,00%
0,00%
0,00%
7.52%
0,00%
0,00%
3.05%
0,00%
32.59%
0,00%
0,00%
0,00%
3.63%
23.45%
0,00%
0.61%
0,00%
0,00%
0,00%
2.37%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.08%
0,00%
0,00%
0,00%
0,00%
21.18%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.07%
0,00%
0,00%
8.38%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.08%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.02%
0,00%
0,00%
0,00%
0,00%
0,00%
19.58%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4.16%
0,00%
0,00%
0,00%
0,00%
0.09%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.64%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
56
70
71
72
73
74
75
76
77
78
Inmins
ISA Holdings
Italtile
Integrear
Interconnective Solutions
Intertrading
Jasco Electronics Holdings
Johnnic Holdings
Kagiso Media
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
14.01%
0,00%
0,00%
0,00%
0,00%
0,00%
0.61%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.31%
0,00%
0,00%
0,00%
0,00%
5.85%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
79
80
81
82
83
Kairos Industrial Holdings
King Consolidated Holdings
KWV Investments
Labat Africa
Mathomo Group
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.26%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
84
85
86
87
88
89
90
91
Metair Investments
Mittal Steel South Africa
Mnet
MoneyWeb Holdings
Moribo Leisure
Moulded Medical Supplies
Mr Price Group
Mvelaphanda Group
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.61%
0,00%
0,00%
0,00%
0,00%
0,00%
5.58%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.92%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
11.37%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
7.56%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4.66%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4.85%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.15%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.76%
0.15%
0,00%
0,00%
1.19%
0,00%
0,00%
0.19%
0.30%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.66%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
92
Namibian Sea Products
Network Healthcare
Holdings
New Africa
New Clicks Holdings
Nictus
Omnia Holdings
Onelogix Holdings
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
31.92%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
26.57%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.43%
0,00%
4.10%
0,00%
0,00%
0,00%
3.47%
0,00%
3.68%
0,00%
0,00%
0,00%
3.69%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.01%
4.12%
0,00%
0,00%
0,00%
0,00%
0,00%
0.26%
0,00%
0,00%
0,00%
0,00%
0,00%
0.03%
0,00%
0,00%
0,00%
0,00%
0,00%
6.42%
0,00%
0.79%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
7.47%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.31%
0,00%
0,00%
0,00%
15.68%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.27%
0,00%
0,00%
0,00%
0.93%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
11.46%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
4.92%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
104
Ozz
Pals Holdings
Pasdec Resources SA
Petmin
Pinnacle Technology
Holdings
Pretoria Portland Cement
Company
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
105
Primeserv Group
0,00%
0,00%
0,00%
17.48%
0,00%
0,00%
0,00%
3.05%
4.35%
0,00%
10.80%
0,00%
1.58%
4.04%
0,00%
0,00%
0,00%
0,00%
93
94
95
96
97
98
99
100
101
102
103
57
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
Profurn
Purple Capital
Putco
Rainbow Chicken
Rareco
Relyant Retail
Reunert
Sasol
Sekunjalo Investments
Southern Electicity
Company
S&J Land Holdings
Sovereign Food Investments
Spanjaard
Spectrum Shipping
Spur Corporation
Square OneSolutions Group
Stella Vista Technologies
Tiger Wheels
Tongaat- Huletts Group
Transpaco
Trencor
Truworths International
Unitrans
Vaalauto
Venter Leisure and
Commercial Trailers
Vesta Technology Holdings
WB Holdings
WilsonBayly HolmesOvcon
Wesco Investments
139
Winhold
Woolworths Holdings
Wooltru
Yomhlaba(Zenith)
The York Timber
Organisation
140
Zaptronix
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
9.04%
0,00%
0,00%
0,00%
1.74%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
15.36%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.38%
0.06%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.31%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.76%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
2.99%
3.07%
0,00%
5.82%
0,00%
0,00%
0,00%
0,00%
0,00%
0.30%
4.21%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
9.43%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.81%
3.30%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
54.41%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
6.79%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
26.10%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
11.38%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.11%
0,00%
0,00%
5.85%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.49%
0,00%
0,00%
0,00%
0,00%
1.32%
0,00%
0,00%
0,00%
0,00%
0,00%
1.01%
0,00%
0,00%
2.06%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.95%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.02%
0,00%
0,00%
0,00%
0,00%
8.64%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.67%
0,00%
0,00%
0,00%
0,00%
0,00%
3.57%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.45%
0,00%
1.89%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.75%
0.95%
0,00%
0,00%
4.47%
0,00%
0,00%
0,00%
0.47%
0,00%
0,00%
0,00%
2.98%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.03%
0.79%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.79%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
10.77%
0,00%
4.17%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
1.07%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0.52%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
5.67%
0,00%
0,00%
0,00%
3.66%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
58
CHAPTER 5
SUMMARY AND CONCLUSION
Share buybacks have the capacity to play a central role in changing a company’s capital
structure. The optimal capital structure of a company is the one that maximises the price of
the company’s shares, and this generally calls for a debt ratio that is lower than the one that
maximises expected earnings per share. It is difficult to estimate how a given change in the
capital structure of a company will affect the share price. The maximum value occurs if the
capital structure minimises the weighted average cost of capital, assuming that the capital
structure does not change the cash flows. The greatest benefits from a share buyback will fall
due to low-leverage companies and companies whose leverage had decreased the most prior
to a share buyback.
In the South African context share buybacks have only been allowed since 30 June 1999, as
directed by the 1999 Companies Amendment Act (Act 37 of 1999). The 1999 Companies
Amendment Act dramatically changed the capital maintenance rules. The results of this
empirical study indicate that in the first year when backbuying was permitted (2000), 14
companies elected to participate in share buybacks through the company, a subsidiary or trust.
As discussed in Chapter 2, the motivation behind the buyback decision may vary. Literature
suggests that the primary reason for share buybacks is to transfer wealth from short-term
traders to long-term investors if management perceive share prices to be trading below
intrinsic value (Ikenberry & Vermaelen, 1996). Information asymmetry put management in
the best position to make a value versus price buyback decision. In the event that management
do decide on a share buyback and indicate that the decision makers will not sell any of their
own shares, a positive signal is sent to the market in that they believe in the company’s future
success.
59
Share buyback transactions have increased from 2000 to 2005, as indicated in Table 4.4. Lowleverage companies stand to benefit most from a share buyback. The high cost of debt,
combined with the volatility of the prime lending rate in the South African context, may have
contributed to companies being low-leveraged and eager to participate in share buyback
transactions as soon as they were allowed to by the Companies Amendment Act.
60
LIST OF SOURCES
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Thomson Learning.
Chan, K., Ikenberry, D. L. & Lee I. 2003. Economic sources of gain in stock repurchases.
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Chan, K., Ikenberry, D. L. & Lee I. 2004. Economic sources of gain in stock repurchases.
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authority. Johannesburg: University of the Witwatersrand.
Fama, E.F. 1965. Random walks in stock market prices. Financial Analyst Journal, 21(5),
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Grullon, G. 2000. The information content of share repurchase programs. Working paper.
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61
Grullon, G. & Ikenberry, D.L. 2000. What do we know about stock repurchases? Bank of
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Ikenberry, D. & Vermaelen, T., 1996. The option to repurchase stock. Financial
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Mikkelson, W.H. & Partch, M.M. 1988. Withdrawn security offerings. The Journal of
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Miller, M.H. 1988. The Modigliani-Miller proposition after thirty years. Journal of Economic
Perspectives, 2, 99-120.
Miller, M. & Rock, K. 1985. Dividend policy under asymmetric information. Journal of
Finance, 40, 1031-1051.
Modigliani, F. & Miller, M.H. 1958. The cost of capital, corporate finance and the theory of
investment. American Economic Review, 48, 261-297.
Petit, J. 2001. Is a share buyback right for your company? Harvard Business Review. 79(4),
141-147.
Pretorius, J.T., Delport, P.A., Havenga, M. & Vermaas, M. 1999. South African company law
through the cases. October. Juta & Co, Ltd.
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Republic of South Africa. The Income Tax Act, no 58 of 1962.
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Standard and Poor’s 2005. S and P 500 Companies using excess cash to reduce share count:
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Stephens, C. & Weisbach, M. 1998. Actual share reacquisitions in open-market repurchase
programs. Journal of Finance, 53, 313-333.
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options play? Working paper. University of Illinois.
64
APPENDIX
An analysis of share transactions of a sample of 140 companies listed on the JSE in view of
buyback transactions from 2000 to 2005.
65
INDEX OF APPENDIX
1. Absolute Holdings………………………………………………………………… 70
2. Adcorp Holdings……………………………………………………………..…... 71
3. Adonis Knitwear Holdings……………………………………………………..… 72
4. AECI…………………………………………………………………………..….. 73
5. Afgri……………………………………………………………………………… 74
6. African Oxygen…………………………………………………………………… 75
7. African and Overseas Enterprises………………………………………………… 76
8. Afrox Healthcare………………………………………………………….……… 77
9. AG Industries……………………………………………………………………… 78
10. Alex White Holdings……………………………………………………………… 79
11. Alliance Data Corporation………………………………………………………… 80
12. Allied Technologies………………………………………………………………. 81
13. All Joy Foods……………………………………………………………………… 82
14. Amalgamated Beverage Industries …………………………………………….… 83
15. Astral Foods……….………………………………………………………………. 84
16. AVI …………………………………………………………………………...….. 85
17. Awethu Breweries………………………………………………………………… 86
18. Barloworld………………………………………………………………...………. 87
19. Basil Read Holdings………………………………………………………………. 88
20. Bearing Man………………………………………………………………………. 89
21. Beige Holdings……………………………………………………………………. 90
22. Bell Equipment……………………………………………………………………. 91
23. The Bidvest Group………………………………………………………………… 92
24. Bicc Cafca…………………………………………………………………………. 93
25. Bowler Metcalf……………………………………………………………………. 94
26. Bryant Technology………………………………………………………………… 95
27. Buildmax………………………………………………………………………….. 96
28. Bytes Technology Group…………………………………………………………. 97
29. Cargo Carriers…………………………………………………………………….. 98
30. Cashbuild…………………………………………………………………………. 99
31. CCI……………………………………………………………………………….. 100
66
32. Cenmag Holdings………………………………………………………………… 101
33. City Lodge Hotels………………………………………………………………… 102
34. Combined Motor Holdings………………………………………………………. 103
35. Command Holdings……………………………………………………………… 104
36. Compu-Clearing Outsourcing……………………………………………………. 105
37. Concor……………………………………………………………………………. 106
38. Control Instruments Group………………………………………………………. 107
39. Creditvision Holdings……………………………………………………………. 108
40. Crookes Brothers………………………………………………………………… 109
41. Cullinan Holdings ……………………………………………………………….. 110
42. Cyberhost………………………………………………………………………… 111
43. Datatec………………………………………………………………………….… 112
44. Delta Electrical Industries………………………………………………………..
113
45. Dimension Data Holdings………………………………………………………..
114
46. Distell Group……………………………………………………………………..
115
47. Distribution and Warehousing Network……………………………………….… 116
48. DNA……………………………………………………………………………… 117
49. Dorbyl…………………………………………………………………………….. 118
50. Dynamic Cables RSA…………………………………………………………….. 119
51. Edgars Consolidated Stores…………………………………………………….… 120
52. ELB Group……………………………………………………………………….. 121
53. Elixer Technology Holdings…………………………………………………….... 122
54. Ellerine Holdings…………………………………………………………………. 123
55. EnviroServ Holdings……………………………………………………………… 124
56. ERP.com Holdings……………………………………………………………….. 125
57. Eureka Industrial………………………………………………………………….. 126
58. Foschini…………………………………………………………………………... 127
59. Global Technology……………………………………………………………….. 128
60. Global Village Holdings……………………………………………………….… 129
61. Highveld Steel and Vanadium Corporation…..………………………………….
130
62. Howden Africa Holdings………………………………………………………...
131
63. Hudaco Industries……………..…………………………………………………
132
64. Idion Technology Holdings……………………………………………………… 133
65. Illovo Sugar………………………………………………………………………
134
67
66. Indequity Group………………………………………………………………….
135
67. Industrial Credit Company Africa ………………………………………………
136
68. Info Wave Holdings……………………………………………………………...
137
69. Inmins……………………………………………………………………………. 138
70. Integrear………………………………………………………………………….. 139
71. Interconnective Solutions………………………………………………………… 140
72. Intertrading……………………………………………………………………….
141
73. ISA Holdings…………………………………………………………………….. 142
74. Italtile…………………………………………………………………………….. 143
75. Jasco Electronics Holdings….…………………………………………………...
144
76. Johnnic Holdings………………………………………………………………… 145
77. Kagiso Media…………………………………………………………………….
146
78. Kairos Industrial Holdings……………………………………………………….
147
79. King Consolidated Holdings……………………………………………………..
148
80. KWV Investments………………………………………………………………..
149
81. Labat Africa………………………………………..…………………………….. 150
82. Mathomo Group………………………………………………………………….. 151
83. Metair Investments……………………………………………………………...... 152
84. Mittal Steel South Africa………………………………………………………… 153
85. M-Net…………………………………………………………………………...... 154
86. Money Web Holdings……………………………………………………………. 155
87. Moribo Leisure…………………………………………………………………… 156
88. Moulded Medical Supplies……………………………………………………….. 157
89. Mr Price Group……………………………………………………………….….. 158
90. Mvelaphanda Group…………………………………………………………..….. 159
91. Namibian Sea Products…………………………………………………….…….. 160
92. Network Healthcare Holdings…………………………………………….……… 161
93. New Africa………………………………………………………………….……. 162
94. New Clicks Holdings…………………………………………………………….. 163
95. Nictus…………………………………………………………………………….. 164
96. Omnia Holdings………………………………………………………………….. 165
97. Onelogix Holdings……………………………………………………………….. 166
98. Ozz……………………………………………………………………………….. 167
99. Pals Holdings…………………………………………………………………….. 168
68
100. Pasdec Resources………………………………………………………...…….. 169
101. Petmin………………………………………………………………………….. 170
102. Pinnacle Technology Holdings…………………………………………………. 171
103. Pretoria Portland Cement Company……………………………………………. 172
104. Primeserv Group……………………………………………………………….. 173
105. Profurn…………………………………………………………………………. 174
106. Purple Capital…………………………………………………………………..
175
107. Putco…………………………………………………………………………… 176
108. Rainbow Chicken………………………………………………………………
177
109. Rareco………………………………………………………………………….
178
110. Relyant Retail………………………………………………………………….
179
111. Reunert…………………………………………………………………………
180
112. Sasol……………………………………………………………………………
181
113. Sekunjalo Investments…………………………………………………………
182
114. S&J Land Holdings……………………………………………………………
183
115. Southern Electricity Company…………………………………………………
184
116. Sovereign Food Investments…………………………………………………… 185
117. Spanjaard………………………………………………………………………
186
118. Spectrum Shipping…………………………………………………………….
187
119. Spur Corporation………………………………………………………………
188
120. Square OneSolutions Group…………………………………………………… 189
121. Stella Vista Technologies.…………………………………………………….
190
122. The Don Group…………………………………..……………………………
191
123. The York Timber Organisation……………………………………………….
192
124. Tiger Wheels………………………………………………………………….
193
125. Tongaat – Huletts Group………………………………………………………
194
126. Transpaco……………………………………………………………………..
195
127. Trencor………………………………………………………………………..
196
128. Truworths International……………………………………………………….
197
129. Unitrans……………………………………………………………………….
198
130. Vaalauto………………………………………………………………………
199
131. Venter Leisure and Commercial………………………………………………
200
132. Vesta Technology Holdings…………………………………………………..
201
133. WB Holdings…………………………………………………………………
202
69
134. Wesco Investments……………………………………………………………
203
135. WilsonBayly Holmes-Ovcon………………………………………………….
204
136. Winhold……………………………………………………………………….
205
137. Wooltru………………………………………………………………………..
206
138. Woolworths Holdings…………………………………………………………
207
139. Yomhlaba (Zenith) ……………………………………………………………
208
140. Zaptronix………………………………………………………………………
209