The IBEX 35 companies continued their policy of buying treasury shares (own shares) and amortization of securities during the first half, a period in which maximums were recorded in both concepts, according to the service of the BME studies, manager of the Spanish scholarships. These are two forms of self-defense for company listings and help stabilize prices and improve shareholder remuneration policy.
As of June 30, they held 1.35% of their capital, i.e. six tenths more than at the end of 2021 and more than double that of 2020, while the amount of shares repurchased during the first six months of the year amounts to 7,600 million euros. , 130.3% more than over the whole of the past year and a record in the historical series.
In 2021, all 35 companies in the index increased their own shares, but the amortization rate continued the trend of the previous two years and fell 18.9% to 3,298.3 million.
The shares that remain in the company do not receive the dividend that the company distributes, which results in an increase in the proportion that the outstanding shares held by the shareholders receive.
“This simple fact can already represent an indirect formula to increase the remuneration of shareholders”, explains the BME study.
Moreover, if the own shares are repurchased, as is the tendency of the IBEX companies, this indirect remuneration is consolidated and can lead to an increase in the price of the securities on the market, since the value of the company is spread over less of shares.
“This second case is the one that appears to have accelerated in 2022,” the report said, in a trend also seen in Europe and common for years in US companies.
This year’s securities amortization data “reinforces the strong remuneration commitment of a large part of Spanish listed companies which, for years, has been fundamentally based on high and recurring dividend payments”, he concludes.
The dividend paid by listed companies in the first half of the year amounted to 12,680.76 million euros, 45% more than that paid in the same period of 2021.
SECTORS WITH THE HIGHEST AMORTIZED VOLUME
By sector, the financial company stands out by buying back 2 billion shares and, despite this, by maintaining the percentage of capital in own shares at 1.33% at the end of June. Big banks like Santander, BBVA or Caixabank have launched a share buyback program in recent months.
The basic materials, industrials and construction sector ended 2021 with an equity percentage of 3.57%, above the average of 1.29% for the whole index, while that the pharmaceutical sector closed with 1.62% (BME does not provide data for the first half of 2022).
In the first half of the year, ArcelorMittal’s amortization amounted to nearly 3,330 million euros, the highest for the year to date; that of ACS, which amortized 499 million; and that of Repsol, with 1,200 million.
Precisely these three companies are the ones with the most own shares at the end of 2021, according to the BME report.
ACS and Arcelormittal respectively owned 9.28% and 6.52% of its capital and Repsol, 4.2%.
On the other hand, Aena and Solaria were the only companies without own shares and Cie Automotive held 0.01%.