Share buybacks fail to boost firms' long-term stock performance

With shares of more than half the companies that had offered buybacks since April 2017 trading below their maximum repurchase price, the programme has failed to boost companies’ long-term stock performance.

Since April 2017, 176 companies have repurchased their shares. Some of them have done multiple buybacks. Of these shares of 111 companies are trading currently below the price.

Buybacks have gained popularity over the past couple of years as the preferred method of returning cash to shareholders in a tax-effective manner, especially after the 10 per cent additional tax on dividend income came into effect in April 2017.

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