Should Buy Backs be Banned???

Hi Guys,

I have just been discussing on market buy backs with some people. We have decided that for various reasons they should not be allowed to continue in current form. I am using NAB as a example.

1. Market manipulation - at times the buyback has constituted upwards of 25% of the days volume. Surely this hinders a fair and reasonable market.

2. Price Manipulation - A large scale buy back must effect the true market price. Surely this hinders a fair and reasonable market.

3. Shareholder responabilities - Supporting the price by buy back cannot be good for shareholders. The company is paying too much for the shares.

4. Broker behaviour - It is in the best interests of the buy back broker for the price to be higher as it gives them a higher maximum price.

5. Broker Behaviour - the buy back broker should only be able to bid for stock. They should not be able to "hit the offer". Surely this hinders a fair and reasonable market.


I am interested in the thoughts of others. Remember that NAB is an example so this is not a bank bashing thread.