ECB stimulus may promote buyback boom, not growth

London

EUROPEAN companies are likely to join a boom in share buybacks as central bank cash floods the economy, risking criticism that they are recycling capital rather than investing to promote growth.

European firms are already cheering financial markets by increasingly following their US counterparts in returning cash to investors, propping up their share prices while the eurozone economy remains sluggish.

But with the European Central Bank starting a one trillion euro (S$1.5 trillion) stimulus programme on Monday, political pressure will probably grow on companies to…