Proactive Investors - The FTSE 100 remains the place to be for eye-popping share buybacks, with today’s announcements from HSBC Holdings PLC (LSE:LON:HSBA) and BP plc (LON:BP) bringing year-to-date returns via buybacks to £26.9bn, following a record £55.8bn of buybacks in 2022.
On top of the buyback bonanza, dividends are expected to top £85bn for 2023, following a record year in 2022.
Despite 2022 being one of the worst years for the stock market on record, London’s blue-chip index befitted from the significant weighting attributed to mining, oil, banking and pharmaceutical companies.
Share buybacks have become a source of controversy due to the substantial cash windfall Big Oil and banking firms have attracted while consumers have struggled with soaring energy and living costs.
AJ Bell investment director Russ Mould commented: “The debate over the rights and wrongs of the bumper profits made by HSBC and BP will run and run but from the narrow perspective of investment their announcement of fresh multi-billion dollar share buyback schemes – topped up by a fresh programme at Ashtead (LON:AHT) – means that the FTSE 100 cash return bonanza continues."
Despite the buybacks, sentiment toward UK equities remains low, driven in part by a number of high-profile delistings.
Whether 2023 will bet out 2022 in the buybacks stakes is unclear.
"Much may depend on the trajectory of the global economy in the second half, but we are certainly off to a fast start,” said Mould.