Big firms splash pandemic stash on buybacks
US companies have been leveraging high cash balances accrued during the pandemic to increase share buybacks, in a trend that looks set to continue throughout 2022, data compiled by Bloomberg shows. Total 2021 share buybacks could exceed USD 870 bn when the data is complete, topping 2018’s record USD 806 bn. Companies are using buybacks to support investor confidence through recent market volatility, driven in part by the prospect of rising interest rates and geopolitical tensions,
Big Oil is also following the trend, with the world’s seven largest oil companies set to return an estimated USD 38-41 bn to shareholders through buybacks this year, the Financial Times reports. These levels haven’t been seen since 2008, when share buybacks from oil giants exceeded USD 46 bn, driven by Exxon’s huge share repurchasing scheme. Oil and gas firms are seizing the chance for cheap buybacks following sector-wide underperformance during the pandemic, with most management teams feeling their shares have been undervalued, one analyst said.
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THE CLOSING BELL-
The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 501 mn (51.4% below the 90-day average). Foreign investors were net sellers. The index is down 4.8% YTD.
In the red: Heliopolis Housing (-5.2%), Palm Hills Development (-5.1%) and Qalaa Holdings (-4.4%).