Why are so many companies engaging in 株 buybacks and what does it mean for the UK market?
- 見積（る）s 示唆する half of UK 会社／堅いs on?main market have bought 支援する 株
- Buybacks 許す companies to return 黒字／過剰 資本／首都 to 株主s?
- Undervalued UK market sees 会社／堅いs 選ぶing for buybacks over （株主への）配当s?
In 最近の weeks there has been a flurry of big companies 発表するing 株 buyback programmes.
Just this week Holiday Inn owner IHG 発表するd a fresh $800million (£633 million) buyback 計画／陰謀. Other 世帯 指名するs have 開始する，打ち上げるd 類似の programmes in past months.?
It is part of a longer-称する，呼ぶ／期間／用語 傾向 in which 法人組織の／企業のs are shunning （株主への）配当s in favour of buybacks to return 資本／首都 to 株主s. Some 見積（る）s 示唆する around half of companies on the main market have bought 支援する 株.
While this might have become a popular 選択 for big companies, it is not so 井戸／弁護士席 understood by 投資家s.
We look at why so many are buying 支援する their 株 and what it means for both the UK market and 投資家s.
Buyback 大当り: 見積（る）s 示唆する half of UK companies on main markets have bought 支援する their 株
What are 株 buybacks?
株 buybacks are another way for 会社／堅いs to return 超過 to 株主s by buying their own 株, cancelling them and 最終的に 減ずるing the number of 株 in 循環／発行部数.
One of the main 推論する／理由s a company buys 支援する 株 is because they believe that their 在庫／株 is undervalued. Cutting the number of 問題／発行するd 株 can help to 押し進める up the value of the remaining 株.
In practical 条件, companies often favour buybacks over （株主への）配当 payouts because they’re more 柔軟な. Companies can’t really start to 増加する a （株主への）配当 without 存在 公正に／かなり 確かな they can continue to 支払う／賃金 out to 株主s.
選ぶing for a buyback when there’s 超過 cash means that when tougher times come, they can be 停止（させる）d and 会社／堅いs are いっそう少なく likely to 直面する 批評 than if a （株主への）配当 is 削減（する）.
Buybacks are also often favoured because they can be more 税金 efficient as the 資本／首都 伸び（る）s can be 税金d at a lower 率 than income from （株主への）配当s.
But buybacks also 誘発する／引き起こす a lot of 審議. Critics say that if a company’s 株 price rises after the 告示 of a buyback, short-称する，呼ぶ／期間／用語 投資家s can make a 利益（をあげる）.
They also say that cutting the 量 of 株 in 循環／発行部数 make it easier to earn 特別手当s tied to 収入s per 株.
Why are more UK companies 選ぶing for 株 buybacks now?
株 buybacks have been a major feature of the US market, 特に in tech companies, while （株主への）配当s have been more of a 優先 in the UK.
This month Uber 発表するd a $7billion 株 buyback after 報告（する）／憶測ing its first 十分な-year operating 利益（をあげる）.?
But 研究 shows that, for a second year running, large UK companies almost matched the US when it （機の）カム to buybacks.?
It 示すs a 抱擁する 出発 from previous activity where US activity has outstripped any other major market.
Last year the 割合 of UK companies doing larger buybacks （警官の）巡回区域，受持ち区域 the US - 13 per cent of UK companies bought 支援する at least 5 per cent of their 株 compared with 9 per cent in the US.
So why have buybacks become so popular in 最近の years?
株 buybacks have been a major feature of the US market with Uber 発表するing a $7billion one this month?
UK companies 貿易（する） at a 抱擁する 割引, around 10.8 times their 予測（する） 収入s for 2024, 井戸／弁護士席 below the long-称する，呼ぶ／期間／用語 median level of over 13 times.
投資家s neglecting UK 公正，普通株主権s means that companies are looking to buybacks
Jason Hollands, managing director of Bestinvest, says: ‘With UK 株 prices so undervalued, the 事例／患者 for companies who have cash on their balance sheets to use some of this to buy their own 株 and then 取り消す them to 減ずる the 株 in 発行, is a やめる 説得力のある form of self-help rather than just waiting things out and hoping 投資家s will at some point take 利益／興味 in the UK again.’
投資家 利益／興味 in the UK is 病弱なing まっただ中に 経済的な 不確定 and is doing little to change the ‘unloved and undervalued’ moniker the UK has reluctantly 可決する・採択するd.
‘If companies don’t 行為／法令／行動する to support their 株 prices, international predators could soon turn up and 掴む a 取引 for themselves by acquiring UK companies,’ 追加するs Hollands.
Ian Lance and Nick Purves of Redwheel, who manage the 寺 妨げる／法廷，弁護士業 投資 信用, have taken this 見解（をとる）. They point to Next which managed to 配達する a total return of 15.4 per cent per 年 between 2001 and 2021, when sales grew just 4.6 per cent a year, in large part because of a 株 buyback programme that 削減（する） 株 in 問題／発行する by 60 per cent.
At the end of last year, Lance said buybacks would rerate depressed valuations across UK 公正，普通株主権s.
Others are more 用心深い about buybacks, preferring instead to 投資する 黒字／過剰 cash 支援する into the company.
Brendan Gulston, co-経営者／支配人 of the WS Gresham House UK Multi Cap 基金, says: ‘This 提携させるs better with their 核心 技術 始める，決める rather than 決定するing 在庫／株 level valuations and optimal times to buy 支援する their own 株.’
What do more buybacks mean for the UK market?
In the short-称する，呼ぶ／期間／用語, 増加するd buybacks will put more cash in 株主s’ pockets and go some way in galvanising the market again.
Darius McDermott, managing director at FundCalibre, says: ‘In the past one of the 証拠不十分s of the UK market is that it has over 分配するd its cash flows to income hungry 投資家s.
‘One of the consequences of the pandemic is that it gave a lot of companies the cover to rebase their （株主への）配当s to a more sensible level. This has left them with more cash to reinvest 許すing them more 柔軟性 to do things like 株 buybacks.’
But it doesn’t come without its 問題／発行するs. Hollands says: ‘While buybacks can most definitely help 上げる 株主 returns and could be just the catalyst that the UK market needs to reignite 投資家 利益／興味, they are not without their critics.
‘When companies themselves become the largest 買い手s of their own 株, some would argue 株主 cash would be better returned to them in the form of higher （株主への）配当s, so they can decide where to 投資する it.’
While there has been 批評 of the market losing out on IPOs and more companies delisting, Schroders strategist Harry Goodacre 示唆するs buybacks also 除去する 公正，普通株主権 from markets.
An 分析 of 逮捕する buybacks and new entrants/delistings finds that in the 12 months to December 2023, 逮捕する 公正，普通株主権 供給（する） was 消極的な in the US, UK, Japan, フラン and Germany.
‘While much 焦点（を合わせる） has been on the 拒絶する／低下するing number of 名簿（に載せる）／表（にあげる）d companies, we shouldn’t forget the 出資／貢献 of 株 buybacks to the 傾向 of de-equitisation,’ says Goodacre.
‘For a second year running, use of 株 buybacks outside the US has been much more ありふれた than in the past, and that’s にもかかわらず a higher 利益／興味 率 環境.’
Given just how undervalued UK 公正，普通株主権s have become though, 株 buybacks might seem the only 選択 for some companies.
Gulston says: ‘In 確かな circumstances 株 buybacks can be an attractive use of 資本／首都, 特に when valuations reach 激烈な／緊急の levels of dislocation from the 根底となるs.’
Hollands 追加するs: ‘When UK 株 are cheap, （株主への）配当 産する／生じるs are attractive, I’m in favour of companies buying 支援する their 株 to 上げる 株主 return s. It could be just what the UK market needs.’
What do buybacks mean for 投資家s?
一般に 投資家s tend to like 株 buybacks because they’re receiving some of the 超過 cash from the company where they’re 株主s.
投資家s tend to assume that the buyback will 減ずる the 株 count and 押し進める up the value of the company per 株, but how much does it 上げる the long-称する，呼ぶ／期間／用語 value?
‘An 増加する in buybacks may also signal an absence of profitable 投資 適切な時期s for the company 関心d,’ says Goodacre. ‘So, rather than a 肯定的な, they could be 解釈する／通訳するd by 投資家s as a 消極的な.’
But McDermott thinks buybacks are misunderstood by some 投資家s and ‘there is a misperception that somehow [they’re] a bad thing because companies should be 投資するing instead. This is 完全に wrong… 株 buybacks are very simple.’
For 投資家s, they are a more 税金 efficient way to receive 黒字／過剰 資本／首都 because, unlike （株主への）配当s, they are 税金d at nothing or at a much lower 率.
McDermott says: ‘This is why 過密な住居 Buffet will 行為／行う 株 buybacks for Berkshire Hathaway if the 株 get too cheap, but it has never paid a （株主への）配当. When done 井戸／弁護士席 a buyback can 追加する tremendous value to 株主s.
‘Equa lly if a company is in trouble and seeing its 商売／仕事 崩壊（する） it is a ありふれた mistake for 管理／経営 teams to try and sure up 感情 with a 株 buyback, which can have the consequence of throwing good money after bad.
‘The 底（に届く） line is it's 状況／情勢 扶養家族 but buybacks can be very 効果的な and 投資家s should not be irrationally and emotionally against them.’
