24 June 2024 , 13:56
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Prudential's shares have soared as it launched the first part of a £1.6billion share buyback to enhance returns for investors.
The insurance giant, which primarily operates in Asian markets, revealed over the weekend that it would initiate the buyback scheme, with an initial £553million portion commencing on Monday. Prudential's shares rose by up to 6% on Monday morning as investors applauded the larger-than-expected buyback programme.
Prudential listed in Hong Kong and London announced that the programme will be finalised by mid 2026. Chief executive Anil Wadhwani stated: "I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term."
"The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity." The group also maintains its commitment to dividend growth plans, aiming to boost the payout by 7% to 9% annually.
Philip Kett, an insurance analyst at Jefferies, noted that the buyback was larger than expected: "We had factored in one £790million in the second half, so this buyback is double the amount we anticipated, but is spread over two years rather than six months," he said.
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Prudential has declared, alongside its recent announcement, that it's on track to hit its 2024 new business growth targets, noting that sales trends in the second quarter are "similar" to those seen in the first quarter. The company also mentioned that strides towards its 2027 goals could ramp up the chance of returning additional capital to shareholders.