The recent stock market weakness has prompted a flurry of share buybacks by companies. Galen, Heiton, Kingspan, Independent News & Media, Irish Life & Permanent and IWP are among the companies in the market of late to mop up their own shares.

Buybacks, where the shares are bought in and cancelled, have the effect of boosting earnings by reducing the number of shares outstanding, which is good news for shareholders.

Of the latest buybacks, some look like better news for shareholders than others, depending on the company's particular circumstances and what it intends to do with the repurchased shares.

Irish Life & Permanent has spent €148 million buying back 3.8 per cent of its share capital for cancellation since mid-year, a move that has gone down well in the market. The logic behind the buyback, which is now complete, was clear. It was designed to reduce the company's surplus capital given the lack of acquisition opportunities and, in the process, boost the return to shareholders.

Pharmaceutical group Galen has also been busy over the past month, mopping up and cancelling 0.9 per cent of its share capital at a cost of £6.3 million sterling (€10.04 million). The purchases to date are likely to add marginally to earnings in 2003 and 2004, while further buybacks remain a possibility given that the company has permission to repurchase up to 15 per cent of its share capital.

There is less certainty about Kingspan's plans for the shares it has repurchased, which are being held as Treasury shares. However, the view in the market is that the company is unlikely to reissue these. The Cavan-based group has bought up 2.4 per cent of its stock to date, which brokers estimate could add about 1.5 per cent to earnings per share in a full year.

Meanwhile, there is growing confusion among investors about Independent's buyback strategy. The group has spent more than €10 million buying 6.6 million shares since the release of interim results this month - more than half the trade in the stock in that period.

Given that the company succeeded in knocking just €18.5 million off its €1.3 billion debt burden in the first half, many question whether the money couldn't have been better spent paying down its borrowings.

What Independent intends to do with the shares is also far from clear. Shares bought in by the company earlier this year were sold back into the market, at a profit, some months later. If this remains the company's strategy, it seems a high-risk one. Already, the group is sitting on a hefty loss on stock purchased in June and July at prices between €1.90 and €1.95.

If the company's board of directors, which numbers more than 20, believe the share is truly undervalued, they might be better buying stock with their own money while using company funds to tackle the debt issue.