Richter announced yesterday it plans to purchase 20,000 shares for its bonus program in a stock exchange statement.
Our view: We see the news could trigger some positive reaction on the market. We see this amount fully covers the semi-annual reward of the top management members and the excellent workers of Richter, thus we do not expect Richter to purchase more than the currently flagged amount in the short-run (last year they distributed 14,829 shares and in 2005 21,000 shares at the end of the first half). Since the distribution of the semi-annual rewards should happen before the end of 1H07, we expect share purchases to materialize before 30 June 2007. Richter has another bonus program when all Richter employees get bonus payments in proportion to the years they spent at the company, which is usually paid by year ends. For this annual and the second semi-annual bonus payment Richter usually make purchases in December. Last year they purchased 93,242 shares in December for the two type of bonus programs altogether.