Share buy-backs are continuing to prove popular with Carnival the latest corporate to announce a $1 billion share buy-back plan. The ocean liner operator is responding to plans by S&P, the rating agency, to change its method of accounting for company stock that is openly available to shareholders. Under S&P rulings its rated companies will be accounted for by their free float, instead of the total number of shares outstanding. This could increase the sales volume on company stock.
Diageo, Alliance UniChem, Boots and Marks & Spencer have all recently re-acquired shares from investors citing excess cash flows and a desire to reimburse investors. Of course, it might be because they don't want to pay higher dividends to shareholders, or equally, they want to boost share price by giving a subtle hint to the market about future growth for the company.
For more on share buy-backs see CF's November feature on share buy-backs, bond buy-backs and special dividends.