Let us be clear about share repurchase !

In the context of a so-called Pact of responsibility favoring business the French Prime Minister, fellow ministers and MPs want to rein the payment of dividends by companies: if we leave these politicians to their old demagogic moons we should here understand that part of the misunderstanding comes from a gross overvaluation of the dividend actually paid to shareholders.

As earlier explained by Proxinvest (French partner of ECGS) on Proxinvest website, then later in 2012 on the Cercle les Echos (French newspaper) one must correct the exaggerated figures presented by our best experts.

The daily Les Echos maintains further in 2014, as many other financial newspapers, that a share repurchase followed by its cancellation by a company is a distribution by this company to its shareholder. Accordingly CAC 40 top French companies paid EUR 6.6 billion in 2013 this way on a total of EUR 43 billion "remitted to shareholders" says Les Echos, for us an error of 15% "inside, or a misleading 18% increase of the dividend amount actually paid in 2013!

The French partner of ECGS explains elsewhere on its website that the cancellation of repurchased shares is not a distribution, but a (risky) investment , and that the shareholder who has sold his security has not received a distribution but only the price for the transfer of his shares.

ECGS recommends investors to clarify such misleading press statements.

Paris, April 2014