Buy back has begun, shares up in Singapore to $17.11 US (I converted to US where US$1=S$1.63). biz.yahoo.com
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Sunday November 22, 11:26 pm Eastern Time
Creative rises on share buy-back
SINGAPORE, Nov 23 (Reuters) - Multimedia firm Creative Technology Ltd's shares surged more than eight percent to Singapore $28.10 on Monday on its share buy back programme, analysts said.
At 0415 GMT, the shares were trading around S$27.90 on more than 220,000 units.
''The buy-back gives Creative the ability to defend its share price on Nasdaq, where short-selling is allowed and options are regularly written on the stock,'' DBS Securities research analyst Russell Tan told Reuters.
Early Monday, Creative, which is listed in Singapore and the United States, said it had started buying back its shares on Nasdaq.
The group had announced in October it planned to buy back 9.3 million shares or about 10 percent of its issued share capital by year-end.
Tan, who has had an ''accumulate'' on Creative shares since they were at S$15.40, said the share buy-back was likely to improve perception of Creative's fundamentals, which has been affected by the volatility of the stock price.
''The market has had, in our opinion, an exaggerated perception of the risk in Creative but this company, paradoxically, is one of the most likely to thrive in the new world order,'' Tan said.
''We believe large companies, like Creative, with proprietory technologies, strong brand equity and good control of the channel will show the best sustained earnings performance over the long term,'' he said.
Analysts' optimism was further fuelled by Creative's renewed assault on the graphics-card market, which could account for 15-20 percent of its revenue in the December quarter according to Chairman Sim Wong Hoo.
Tan said this was significant because Creative's core audio segment was also expected to do well.
The group has shipped a million units of its SoundBlaster Live! in the 10 weeks since the September launch.
ING Baring's analyst David Toh, who has a buy recommendation on Creative, said the fair price for the shares was around US$18.00 (S$29.34).
''Its PE (price earnings) of eight times 1999 earnings is still cheap,'' Toh said.
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GO CREAF!!!! I assume this means that the spike and heavy volume last fri was not due to Creaf buying back shares yet; bodes well... |
