LIVE MARKETS-Share repurchases to provide renewed support for Europe

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SHARE REPURCHASES TO PROVIDE RENEWED SUPPORT FOR EUROPE

European shares are again trading at a record high, and Barclays believes that share buyback activity could be a source of further upside for the region's stocks.

Most public companies have policies that restrict share repurchases around earnings, usually a few weeks prior to reporting results until shortly after the results are released.

"With blackout periods having peaked in early February, buyback activity is re-accelerating and should support European equities' upward momentum," Barclays equity strategists say in a note.

"Median returns around blackout windows point to ~2% gains in the three months after the peak, reinforcing a supportive outlook for the next couple of months," they add.

The firm believes fundamentals are also supportive of more buyback activity.

"Strong economic activity continues to underpin buyback strategies given their cyclicals tilt, while rising money supply points to firmer momentum ahead," they say.

"With growth signals improving into the next quarters, the macro backdrop should keep providing a tailwind for the buyback theme."

(Samuel Indyk)

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