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Quick Take: China Inc. Buys Back $2 Billion in Shares in 2018

Photo: VCG
Photo: VCG

More than 300 companies listed on the Chinese mainland have spent 13.5 billion yuan ($2.03 billion) on stock buybacks this year in an effort to prop up their share prices as a bear market loomed, official media reported.

About 50 listed companies have bought back shares since June 21, the state-run China Securities Journal reported Wednesday, citing data from Wind Information, a financial data complier.

Since that date, the benchmark Shanghai Composite Index has shed 4% on fears over an escalating trade war between China and the U.S., and flagging domestic economic data. Mainland stocks have been in a bear market since June 26, with the benchmark index down 22% from the year’s high of 3,559.47 in January.

Most of the 313 companies that have bought back shares this year are in the chemical, electronics and pharmaceutical industries, according to the China Securities Journal report. These companies have repurchased shares to shore up their stock prices and reassure their investors.

The companies have used the repurchased shares in equity incentive plans for senior executives and other important employees, the report said.

Listed companies use share buybacks to send a message to investors that their shares are undervalued, the journal said, citing market insiders.

Contact reporter Pan Che (chepan@caixin.com)

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