{"id":114007,"title":"UK stock market experiencing its most rapid contraction on record","publisher":"Share Talk","author":"sharetalk","published":"2024-04-26T14:13:10+00:00","modified":"2024-04-26T14:13:10+00:00","canonical_url":"https://www.share-talk.com/uk-stock-market-experiencing-its-most-rapid-contraction-on-record/","markdown_url":"https://www.share-talk.com/uk-stock-market-experiencing-its-most-rapid-contraction-on-record.md","json_url":"https://www.share-talk.com/uk-stock-market-experiencing-its-most-rapid-contraction-on-record.json","category":"B2B","categories":["B2B","Blogs","Business & Support Services","Technology","Technology, Media & Telecoms"],"tags":["BANK","FTSE 100","Goldman Sachs","Guillaume Jaisson","S&P 500","Stock Market","UK","USA","Wall Street"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2023/11/Goldman-Sachs-16_11_23.jpg?fit=1200%2C800&quality=89&ssl=1","format":"news","language":"en-GB","content":"According to a Wall Street bank, the UK stock market is contracting at its most rapid rate ever, even as the FTSE 100 reaches unprecedented highs.\n\nGoldman Sachs noted that a mix of company buybacks and a scarcity of new shares being issued will significantly decrease the number of shares available for investors to buy.\n\nThis shrinkage in the market’s public equity supply is expected to drive UK shareholder returns to record levels, analysts claim.\n\nThe trend is likely to persist, with a recent Deloitte survey revealing that most UK chief financial officers believe their companies are undervalued and are planning further buybacks.\n\nShare buybacks, where companies repurchase their own stock from the market, diminish the supply of shares, thus elevating the stock price for investors.\n\nThis analysis by Goldman arrives as the FTSE 100 is poised for its best week since last summer, spurred by several notable takeover offers.\n\nThe UK’s premier stock index soared to 8,136.52 points today, setting a new record for the fourth straight day amid a busy week of mergers and acquisitions.\n\nSo far this week, the index has climbed 2.9%, its most substantial gain since July.\n\nGoldman Sachs analyst Guillaume Jaisson commented, “The combination of dividends plus net buybacks suggests a total yield of 5.5% in the UK, compared to 4.5% in Europe (excluding the UK) and 3.5% in the US.”\n\nHe continued, “The yield gap with the S&P 500 is the widest ever, which positions UK equities as an appealing entry point into Europe and a way to diversify away from the US.”\n\nHe concluded, “In the UK, the blend of buybacks and scarce new issuances has led to the fastest reduction in the net supply of public equity ever recorded.”"}