The main buyer in the form of corporations themselves returned to the American stock market – the volume of buybacks began to grow.
At the end of the third quarter, the amount of funds allocated for the buyback of shares among the companies included in the S&P 500 index amounted to $ 58.8 billion, which is 16.3 billion more than a quarter earlier.
In addition, this volume is only $ 1.1 billion less than was spent on buybacks a year earlier.
Annual S&P 500 Buybacks (US $ million)
The main buyer of shares is still the Apple corporation – in the third quarter of 2020, it acquired its securities for $ 17.2 billion, that is, almost a third of all transactions on the market.
Without the Cupertino company, the total buybacks were $ 41.6 billion.
So far, the financial results of corporations turn out to be much better than the market expected, especially when the forecasts were made at the beginning of the current crisis. Thanks to financial assistance from the authorities, American companies are able to operate quite efficiently, which allows them to continue to buy back their shares, thereby supporting their capitalization.
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- Dow Jones Industrial Share Buyback Volume