Tide turning against buybacks ahead of the market top

FT reports that there has been a change in corporate buyback behaviors, as companies prefer not to deploy their cash to buy back their stocks. While traditionally, companies that engage in buyback behaviors are often rewarded during post-crisis rally, it has been reported that TrimTabs, the US research group, shows that money spent on buying back stock in each of the last two months has been the lowest since January 2013.

And one possible reason is that companies fear that their own company’s stocks may be overvalued. This comes at a time when there are more new offerings in the market, with notable ones being GoPro’s IPO in recent weeks. This begs the question, how long more would the equity rally continue?

Read more at http://www.ft.com/intl/cms/s/0/da7af7d6-fe16-11e3-acf8-00144feab7de.html#axzz36CcgBUKt

Daily Bamboo Insight: 01/07/2014

Daily Bamboo Insight


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