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1.Market Observations, 8.Was Sticky

12 Sept 2016 (AFR) – US share buyback bonanza is losing momentum

(12 September 2016, AFR, p11, by Robin Wigglesworth)

‘Is one of the US stock market’s main pillars of support quietly crumbling? Since the financial crisis, companies buying back their own shares has been one of the biggest drivers of the equity markets’ advance to record highs. Between 2012 and 2015, US companies acquired $1.7tn of their own stock, according to Goldman Sachs, counteracting sales by pension funds, foreign investors and households. Indeed, excluding corporate buybacks, net US equity flows would have been negative to the tune of $1.1tn in that period, despite inflows into exchange traded funds. In other words, the post-crisis recovery would have looked shakier without the backstop of companies themselves.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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