February 28, 2018 / 11:16 PM / 6 months ago

U.S. corporate share buybacks 'explode' in Feb -research firm

WASHINGTON, Feb 28 (Reuters) - The volume of U.S. corporate share buybacks surged in February, an investment research firm said on Wednesday, as the dollar value of programs announced in the aftermath of the Republican tax overhaul appeared headed above the $200 billion mark.

The California-based research firm TrimTabs, which tracks corporate buybacks, said preliminary data for February show the dollar value of buyback programs nearly doubled to $118.5 billion from $59.9 billion in January. TrimTabs said its final tally for February is likely to rise and could set a new record.

“Activity has certainly accelerated. Buybacks increased for five consecutive months beginning in July 2017 and have exploded in February,” said TrimTabs analyst Winston Chua.

“If the pace keeps up, this year’s volume will smash totals from all other previous years going back more than a decade,” he added.

TrimTabs said its preliminary data shows that $183 billion worth of corporate share buyback programs have been announced since Congress enacted the Republican tax overhaul on Dec 20. But the firm said the total could rise another $30 billion to $40 billion and top $200 billion when the final February tally is calculated.

Meanwhile, U.S. Senate Democrats said in a separate report that $209 billion worth of U.S. corporate share buybacks have been announced since Jan. 5, claiming the figure shows that the Republican tax overhaul largely benefits corporations, corporate executives and wealthy shareholders.

Long a flash point for partisan disagreement in Washington, the tax cuts are expected to play a major role in Nov. 6 congressional mid-term elections, which will determine whether Republicans can maintain their majorities in the Senate and House of Representatives.

Republicans including President Donald Trump, who signed tax legislation into law in December, have joined U.S. companies in promoting a recent spate of bonuses, pay raises and other benefits as evidence that the tax overhaul is benefiting workers.

A spokesman for Senate Republican leader Mitch McConnell said Democrats are losing the argument on taxes and dismissed the buyback report as a desperate attempt to change the subject.

The report by Senate Democrats spans more than 30 buyback programs announced by companies from a range of industries including banking, energy, manufacturing, retailing and technology. (bit.ly/2F3tN49) (Reporting by David Morgan; Editing by Lisa Shumaker)

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