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Glossary · PSX term

Share buyback.

A buyback is when a company repurchases its own shares from the market, reducing shares outstanding.

Definition

Buybacks can return cash to shareholders and lift earnings per share by spreading profit over fewer shares. On the PSX, buybacks follow SECP rules and may signal management views the stock as undervalued, though that is not guaranteed.

Worked example

If a company buys back 50 million of its 1 billion shares, future EPS is calculated over 950 million shares.

Related on PSX Clarity

Earnings per share

Treasury shares

Market capitalization

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