The S&P/ASX 200 is at a record high, the share prices of a dozen Australian companies have hit new highs in the past 10 days, and yet boards are preparing to spend more of this year’s profits buying back their expensive shares.Is this really a good use of excess capital? The dilemma is playing out in boardrooms this week. We got a good glimpse of it at AMP’s half-year results on Thursday; one of the season’s early results, where the board signed off on another $150 million buyback as its shares hit a seven-year high.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Why boards are playing it safe and buying high instead of investing
Surplus capital is washing around corporate Australia. It’s easy to hand it back to investors, but it’s time to think harder.
TL;DRAI
Australian boards are allocating $150M+ to buyback overvalued shares despite S&P/ASX 200 at record highs, signaling reluctance to deploy capital in growth investments. This conservative posture reflects boardroom anxiety about valuation risk and lack of compelling strategic alternatives—a bearish signal for tech and innovation-dependent sectors betting on enterprise expansion.
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