Siemens AG, Europe's largest engineering company, will repurchase as much as 3 billion euros ($3.65 billion) in stock by year-end as the company seeks to boost returns for investors stung by deteriorating earnings.

The buybacks will be used to reduce capital stock, to issue shares to employees and board members and to back convertible bonds and warrants, the Munich-based company said in a statement late yesterday. The manufacturer will also cancel 33 million shares held in treasury.

Eoin Treacy's view The global economic slowdown has weighed on industrial shares and particularly those exposed to the Eurozone. However, while investor perceptions have deteriorated towards these companies, many have substantial cash balances. In such a low interest rate environment the challenge of making the best use of available cash is being tackled in a variety of ways.

The pace of mergers and acquisitions activity has picked up, companies have been increasing their dividends and a number have also opted to take advantage of depressed pricing to buy back their shares.

Siemens (listed in Germany) currently yields 4.2% and found support in the region of the October lows from late June. The decision to buy back shares should help encourage bullish participation and a sustained move below €65 would be required to question medium-term scope for additional upside.

Schneider Electrical (yields 3.7% and is listed in France) has announced it will renew efforts to increase growth through acquisitions. The share found support above the October low from June and rallied impressively over the last two weeks. While it may consolidate in the region of €50, a sustained move below €40 would be required to question medium-term scope for continued higher to lateral ranging.

Legrand (yields 3.51% and is listed in France) initiated a buyback program in May. The share has exhibited a mild upward bias since October and a sustained move below €23.50 would be required to question medium-term scope for additional upside.

Wartsilla (3.58% and listed in Finland) has been among the best performers in the sector over the last few years. It had become temporarily overextended by May and pulled back to the region of the 200-day MA where it has at least paused. It will need to hold above the recent lows if the medium-term upside is to continue to be given the benefit of the doubt.

Outside of the engineering sector the pace of share buybacks has also increased. While companies such as Altria and IBM have long established buyback programs, Vodafone (telecoms), Agrium and Yara International (fertilisers) have all recently announced buyback programs.

Vodafone (listed in the UK and USA and yielding 7.46%) broke out of its more than yearlong range this week and a clear downward dynamic would be required to question medium-term scope for additional upside.

In the fertiliser sector, Agrium (listed in Canada and the USA and yielding 1.07%) is somewhat overbought as it tests the 2011 highs and looks susceptible to some consolidation of recent gains. Yara International (listed in Norway and the USA and yielding 2.44%) is testing the upper side of its almost yearlong range and a sustained move below NOK172 would be required to check potential for a successful upward break.

While the above shares have most recently benefitted from support by their respective companies, the prospect of additional liquidity injections by central banks may also contribute to more bullish participation.