Buying by the rules
Algorithmic execution is now being applied in the sphere of corporate buy-backs. While some brokers tout it as the only way to execute, others argue that making the process completely automatic is fraught with danger. By Navroz Patel
US corporates are awash with cash, and many have decided to use this spare capital to buy back their own shares and boost earnings-per-share. S&P 500 corporates spent $349 million on buy-backs in 2005, 77% more than the year before, according to research by Standard & Poor's.
This strong buy-back activity has continued into 2006. Some companies, such as California-based computing giant Hewlett-Packard, have looked at highly structured trades as a way to optimise buy-back execution (Risk April
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