Calling it a "capital restructuring" exercise, SPH said it would return a total of about Singapore $495.9 million (US$286.7 million) in cash to its shareholders on the basis of S$1.22 per share.

"This is the best time to do it. People would like money. This is in actual fact a share buyback...instead of investing in other shares we invest in our own shares," chairman Lim Kim San told reporters at a media briefing.

"By the share reduction exercise we are also making fuller use of our money," Lim said.

In reponse to a question on whether SPH's purchase of its own shares was the best return on equity it could get in the current market situation, Lim said :"I think so."

SPH shares, which were suspended from trading on Thursday morning, resumed trade in the afternoon. At 0804 GMT, the share was trading at S$12.90up S$0.70 After the announcement.

SPH, which has a monopoly on newspaper publishing in Singapore, said the exercise would involve the reduction of the issued share capital of the company by 10 per cent.

The capital distribution would be financed from the company's fixed deposits, cash and bank balances which totalled S$527 million as at May 31, 1998.

The whole execise is expected to be completed by November. It is subject to various regulatory and shareholders approvals and Citicorp Investment Bank (Singapore) has been appointed financial advisers for SPH.

Some industry analysts have said the return of cash to shareholders was an indication of the paucity of investment ideas within the company.

"....This is the underlying message from the company --the synthetic buyback is effectively confirmation that the company cannot find projects that would use all the cash," said media analyst Kaushik Shridharani from Salomon Smith Barney.

"Therefore, to the extent that the market priced in a growth premiumon the hopes that SPH would be able to launch or participate in projects that shareholders could not themselves do, the market should be disappointed."

But SPH company officials said the share buyback hasn't dented the company's appetite for investments.

"We look at anything that is viable," Lim said, adding that proposed acquisitions had to have a synergy with the core business of the group and up to now the company has not found a suitable candidate.

Lim said the group still has about S$1.2 billion in investible funds and investments.

"Basically, the approach we take is that we try to be very focused, looking at core businesses, related businesses where we can add value. The ultimate criteria is whether we are creating value for shareholders," said SPH executive Tjong Yik Min.

He said the company is looking at opportunities all the time whether inside or outside of Singapore. "I think they are very ingenious to announce the exercise now. They have recieved a lot of complaints about their surpluscash and how it has been performing so now they are giving it back," Koh Bee Ann, analyst with G.K. Goh Research said.

"It has almost the same effect by distributing capital now. The company is smart to do it now before its share prices are bid up in anticipation of a share buyback later in the year," Koh said.

Share buybacks for Singapore listed companies is a development widely expected to be approved by the government at the end of the year.