FTSE 100 companies are due to have another record year for share buybacks, having already spent £55bn this year, according to new figures from AJ Bell.

The £55bn spent so far this year is more than double the £21.3bn spent in 2021 and triple the £17bn averaged over the 2010s.

Shell tops the buyback list, according to AJ Bell, followed closely by competitor BP. The energy giants have bought back £13.6bn and £6.3bn, respectively, so far this year.

Banks have also embraced the buyback this year. HSBC and Natwest have bought back £5.6bn and £2.6bn in shares, respectively, this year.

Gervais Williams, head of equities at investment group Premier Miton, told The Times that companies would instead benefit from using their excess cash to pay down debt or saving it for a rainy day.

"If anything, when I see my companies, I say, 'please don't buy back any shares'," he told The Times.

Meanwhile, Charles Hall, head of research at broker Peel Hunt, argued that boosting share prices through buybacks was "good news for everyone" as many people have parts of their pensions invested in the stock market.

(c) 2023 City A.M., source Newspaper