EUROPE - Equity strategists at Citi expect more company share buybacks in the future, and back stocks in the consumer goods, media, retail, healthcare and financial sectors to cash in on this.
"Even though interest rates have increased over the last couple of months, debt financing is still cheap by historical standards, especially when compared to equity financing. Given the large cash piles on company balance sheets, we think companies will continue to return capital to shareholders via buybacks,"they write in a research note.
"We recommend tilting a global equity portfolio towards share buybacks."
Citi recommends looking for stocks that have reduced their share count by at least 5 percent in the last 12 months as potential future buyback candidates.
Its list includes Japanese bank Sumitomo Mitsui Trust, Italian energy group ENI, Dutch electronics company Philips, UK media group BSkyB, Wall Street bank Goldman Sachs and software group Yahoo! Inc.
Illustrating the trend, last month German construction group Hochtief launched a 260 million euro ($341.63 million) share buyback programme and Dutch grocer Ahold quadrupled its programme to 2 billion euros.