GoSeigen wrote:EssDeeAitch wrote:Not sure if this is the correct forum for this question however.....
I see that Standard Life Aberdeen - SLA has bought 1,058,156 of its shares from the market and will then cancel these shares. What does this achieve? Can anyone help?
Well, there are some disgraceful comments being made on this theme but I won't name names.
The simple fact is the developed economies are awash with excess capital and have no profitable use for it. They are therefore returning it to their shareholders, effectively reducing the capital of the company. This is why we invest -- to get a return on our capital. There will be eternal arguments as to whether it should be done as a dividend or share purchase but in the long run it makes close to sod-all difference.
SLA is returning cash to shareholders. It's as simple as that. I like it and I like that dividend investors don't like it and am buying.
I am not disputing what you say as I just don't have the knowledge but I want to make one comment and ask one question: I am a shareholder and no capital has been returned to me and what benefit accrues to me if the capital of the company is reduced? I just don't get it.