Regulatory changes lead to A-share buyback rise
Recent turmoil in the Chinese mainland stock market and changes to the regulations have spurred a strong trend of stock buybacks on the A-share market, as companies move to inject confidence in their stocks.
The number of companies that have announced plans to repurchase their stocks as well as the total value involved have grew exponentially this year, particularly in the second half of the year, when the mainland stock market started to see wild volatility, data showed.
As of November 1, 866 companies have announced plans to buyback a total of nearly 15 billion A shares, compared to 383 companies in 2017 that purchased a total of about 2 billion A shares, according to financial data provider Wind.
About 87 percent of the companies launched share-repurchase programs after June 19, when the mainland stock market started to decline and the Shanghai Composite Index fell below 3,000.
Through the share buyback, the companies were trying to boost their stock prices by injecting confidence amid market volatility and increase-ing returns by reducing the number of publicly traded shares, the Economic Daily newspaper reported on Sunday.
Recent changes made to the regulations regarding share repurchases, including a streamlined process and an extended buyback limit, might have also contributed to the rising trend of A-share buybacks, the report said.
