Chinese firms' share repurchases hit an all-time high while facing a gloomy A-share market at around 2,600 points.
Statistics from Wind, a leading Chinese financial data provider, showed that as of Oct. 29, the amount of share repurchases on the A-share market had reached 30.87 billion yuan (4.4 billion U.S. dollars), much higher than that in 2017 and 2016, which were 8.3 billion yuan (1.2 billion U.S. dollars) and 10.5 billion yuan (1.5 billion U.S. dollars) respectively.
Share repurchase is a program by which a company re-acquire its stocks. The concept was originated from the United States back in the 1950s.
Since 2009, the largest buyers in the stock market in the United States had been the firms themselves. Statistics from the Federal Reserve showed that from the first quarter of 2009 to that of 2018, firms in the S&P 500 index had repurchased their own shares worth 4.23 trillion U.S. dollars.
Since 2011, China's A-share market had witnessed three largest waves of the share repurchase activities. One was from October 2012 to June 2013, the second wave was from August 2015 to June 2016, and the third one is from November 2017 till now.
According to GF Securities, the first two waves of share repurchase both appeared on a sluggish A-share market, which touched its bottom when the buybacks finished or close toward the end. The third wave of share repurchase has lingered for a time duration that is catching up with that of the last two waves, which indicates that the A-share market has stayed at its bottom ebb for a long time.
Statistics show that as of Oct. 30, the top three Chinese firms that have carried out stock buyback were Midea Group, a producer of major home appliances, Yonghui Superstores Co., Ltd. and Joyson Electronics Corp.
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