Investing.com – European corporations announce significant share buyback programs in 2024, and Barclays (LON:) expects this strong buyback activity to continue into 2025.

companies announced share buyback programs of around E290 billion, making 2024 the third highest buyback year ever, Barclays analysts said, in a note dated January 9.

“The Energy sector hit a record high with 11% Mcap buyback programs announced, up from last year. Tech also saw an increase, announcing 4.3% MCap in buybacks. Finally, announced of companies was 2.5% MCap, slightly lower than last year,” the UK bank said.

Shrinking equity supply has been an ongoing theme for European stocks over the past three years. Share repurchases reduced the total share count during this period, and buybacks generated a 1.9% yield for the STOXX 600 and contributed 40% to total shareholder yield.

“Given the weak macro backdrop in Europe – weak macro data, concerns around the potential policies of the incoming Trump administration on risk in the US and China, some self-help is needed for the equity market, and we believe purchases should be treated as a theme,” Barclays added.

About 2% of the trading volume of the STOXX 600 in 2024 will come from share buybacks. This percentage has been steadily increasing since 2020, reaching its peak last year.

“Nearly 75% of buyback programs set to expire in 2025 have not yet been implemented, opening the door for continued high buyback implementation in 2025,” Barclays added.

The UK bank expects earnings growth of 4% in 2025 for the STOXX 600, which is in line with continued buying activity but slightly below the IBES consensus of 8%.

“Q4 2024 results season is about to begin, and this has historically been a big quarter for new purchase policy announcements. On average, 36% of total new purchase policies announced in Q4 results, compared to 21% in other periods,” added the bank.