By: Fraser Thorne
Fraser Thorne discusses trends in share buybacks and whether they deliver value to investors
Equity markets are shrinking fast. Low borrowing costs have encouraged listed firms to pursue the largest program of share buybacks in a decade, up 9.7 percent to $45 bn in the UK alone over the past 12 months, according to Bloomberg.
Meanwhile, fewer companies have gone public for a variety of reasons, including uncertainty caused by global economic and political events and private equity funds and foreign buyers chasing cheap sterling-based acquisitions. Lower yields over the long term have meant firms can keep borrowing cheaply instead of selling shares and risk falling victim to market volatility.