Chinese Companies Opt for Share Buybacks as Market Slumps
China-listed companies take action to support struggling stock market
Dozens of Chinese companies have recently announced plans to buy back shares or cancel stock selling, as authorities implement measures to boost the flagging stock market. This follows a series of similar commitments made by over a hundred Chinese companies in August, after new rules were imposed to stabilize the market amid a waning post-COVID-19 recovery.
Market sentiment remains weak despite stimulus efforts
The country’s blue-chip stock index () continues to hover near one-year lows, as investor confidence remains low despite government stimulus policies aimed at restoring faith in the market.
Chinese companies demonstrate commitment to stability
Several Chinese companies, including China Petroleum (OTC:) & Chemical Corp, China Railway Construction Corp, and China Mobile (NYSE:), have disclosed in recent filings that they have either repurchased their shares or intend to do so in public markets. Additionally, more than 70 other companies have committed to their major shareholders not selling shares in the coming months or have withdrawn plans to offload shares.
Confidence in future development
Wanma Technology and GoodWe Technologies Co have both affirmed that their controlling shareholders will refrain from selling stocks for the next six months, expressing confidence in their companies’ future growth prospects.
Hope for market rescue
China’s state fund, Central Huijin Investment, increased its stakes in the country’s “Big Four” state banks recently, fueling optimism that authorities will intervene to support the market.
These efforts by Chinese companies and government entities aim to stabilize the stock market and restore investor confidence amidst challenging economic conditions. As market conditions evolve, investors will closely monitor these developments and their potential impact on the overall market sentiment.
