Will share buybacks start 'snowball effect' in Japan?

A recent spate of share buybacks among companies jostling to prove they can reward shareholders shows Japanese companies are finally ready to be shareholder-friendly, explains GAM Japan manager Ben Williams.

While 2013 was all about Abenomics, 2014 is the year Japanese companies begin utilising their earnings to reward shareholders. Buyback spree In the first six months of 2013, 107 Japanese companies with a collective market capitalisation of ¥19trn announced share buybacks valued at ¥757bn. For the same period in 2014, 164 companies with a market cap of ¥82trn have announced share buybacks valued at ¥2.5trn. This is roughly equivalent to 3% of these companies’ outstanding shares and a three-fold increase on last year’s activity level over this period. Two of Japan’s leading tradin...