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Aviva (AV) stock rises on extended share buyback

By Rob Griffin

11:47, 16 December 2021

Aviva logo on outside of building
British insurer has announced it’s increasing current programme from £750m to £1bn – Photo: Shutterstock

British insurer Aviva saw its stock rise modestly today after revealing it will extend the share buyback programme that was first announced in August.

In a statement to the London Stock Exchange, the FTSE 100 company said it is increasing the plan from £750m ($995m) to a maximum of £1bn.

The news was enough to push the company’s stock price up 1.5% to 401.71p by late morning in London. This is 23% higher than its 326.6p level at the start of 2021.

Commitment to return £4bn

Chris Beauchamp, chief market analyst at IG, said: “Aviva’s decision to throw more money at its buyback programme has perked up the shares, reminding everyone of the cash flow attractions of these insurers.”

According to Aviva’s statement, the total maximum number of shares to be acquired is now 392 million. The programme will complete no later than the end of March 2022.

Amanda Blanc, Aviva’s group chief executive, said the extension was part of the company’s commitment to returning at least £4bn to ordinary shareholders.


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“We will update further on our capital return and dividend plans at our full-year results in March 2022,” she said.

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Key strategic advantage

Aviva’s intention to return at least £4bn in capital, including the initial £750m share buyback, was revealed when the company announced interim results in August.

At the time, Blanc pointed out that the breadth of Aviva, spreading across life and general insurance, was a key strategic advantage.

“We have made good progress on all fronts in the 12 months since we launched our strategy,” she said. “We are delivering on our commitment to make a substantial capital return to our shareholders.”

Read more: Aviva (AV) to meet or exceed cash, cost-saving targets

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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