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Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (1002)	10/27/2002 3:52:09 AM
From: Don Green	Read Replies (1) \| Respond to of 48738

Corporate Buybacks Of Own Shares Top Y1tln In April-Sept Sunday, October 27, 2002 TOKYO (Nikkei)--Corporate buybacks of own shares totaled 1.1 trillion yen in April-September, up 14% from the previous six months and the first figure above 1 trillion yen, according to a survey compiled by The Nihon Keizai Shimbun. The figure topped the 970 billion yen in new share issuance -- public share offerings plus the issuance of stocks with warrants -- during the first half of fiscal 2002. Reflecting brisk buybacks of own shares, which was partly fueled by the lifting of a ban on treasury stocks in October 2001, corporate traders became net buyers of shares during the six-month period for the first time in 12 years. NTT DoCoMo Inc. (9437) bought back 235 billion yen worth of own shares during the period, while Toyota Motor Corp. (7203) bought back 163 billion yen worth. The aggregate figure of both firms accounted for more than a third of the total during the period. Fanuc Ltd. (6964) and Tokyo Style Co. (8112) bought back their own shares for the first time during the period. Nippon Telegraph and Telephone Corp. (9432) bought back 86 billion yen worth of own shares earlier this month. "If companies that have set quotas for buying back their own equities push ahead with the plans, the total amount of such buybacks could near 3 trillion yen in the whole of fiscal 2002," said an official at Nomura Securities Co.'s Financial Research Center. The brisk corporate buybacks of own shares -- which amounted to 304.4 billion yen more than corporate selling on the Tokyo, Osaka and Nagoya exchanges -- bolstered the overall domestic stock market. Companies bought back their own shares to act as a recipient of shares unloaded by banks trying to unleash cross-shareholdings with other firms and to raise their capital efficiency. This is an indication that companies have grown more conscious of their shareholders, analysts say. However, share buybacks undermine a company's financial standing, as the practice entails an outflow of their internal funds. Thus, firms with a large amount of debts find it difficult to make such stock purchases. U.S. companies are growing increasingly cautious about buying back their own shares, worried about risks surrounding their finances following surging skepticism over corporate accounting. Share issuance by U.S. firms exceeded buybacks by 138 billion dollars in the first six months of this year. (The Nihon Keizai Shimbun Sunday edition)