TASI firms buy back shares at record pace in 2025

Companies, according to the regulations, are permitted to buy back their shares to hold as treasury shares, provided treasury shares do not exceed 10% of the class of shares subject to the repurchase at any given time.

The rules stipulate that the purchase price must not exceed 5% of the previous day’s closing price, the buyback must not result in public ownership falling below 30%, and the shares must be repurchased directly from the market and not through private transactions.

Companies repurchased 80.3 million of their own shares in 2025 for a total of SAR 2.1 billion, marking the highest value of buyback transactions since 2019.

Below table highlights share repurchase trends since 2019:

Most companies repurchased their shares for allocation to employee share programs. The table below outlines the details of the buyback transactions:

**Shares were purchased on the Abu Dhabi Securities Exchange (ADX).

***The company announced the completion of the buyback without disclosing details; the shareholders’ approval was for a maximum of 860,000 shares.

Regulations on Share Buybacks under the Companies Law

Article 17 of the Companies Law allows a company to repurchase its ordinary, preferred, or redeemable shares—if permitted by its articles of association—subject to specific conditions.

Shares may be repurchased to reduce the company’s capital or to hold as treasury shares, provided treasury shares do not exceed 10% of the class of shares being repurchased at any time.

In addition, the company must meet financial solvency requirements certified by its external auditor. These include that the company must have sufficient working capital for 12 months following the completion of the buyback, its assets must not be less than its liabilities (including contingent liabilities) before paying the purchase price according to the latest audited annual financial statements or reviewed interim statements, and the debit balance for treasury shares must not exceed retained earnings.

Shareholders’ approval is required for the buyback, specifying the maximum number of shares, purposes, and funding method. The board of directors is authorized to complete the buyback within 12 months of the extraordinary general meeting (EGM), and the company must immediately disclose this approval and its conditions.

The EGM may amend the purposes of the buyback at any time.

Unless the purpose is to reduce capital, the company may buy no more than 10% of the approved quantity per trading day, except if the remaining approved quantity is less than 10% of the previous day’s trading volume.

The purchase price must not exceed 5% above the previous day’s market closing price, and the buyback must not reduce public ownership of the relevant share class below 30% or any other percentage approved in the company’s prospectus. Shares must be purchased from the market, not through private transactions, unless the buyback aims to reduce capital.

 The company may not buy shares during the 15 days preceding the end of a financial quarter or the 30 days preceding the end of the financial year until the release of reviewed interim or audited annual financial statements, and it must not have a standing sell order at the time of the buyback.

Further, Article 18 specifies the purposes for holding treasury shares. A company may hold repurchased shares as treasury shares only if the board or its delegate determines that the market price is below the fair value, to satisfy holders of convertible debt instruments converting them into shares, for exchange transactions to acquire shares or stakes in another company or purchase an asset, for allocation to employees under an employee share program, or for any other purpose approved by the regulatory authority.