The Shanghai Stock Exchange communicated with the Star-board listed firms after receiving guidance from China Securities Regulatory Commission, according to the people, who asked not to be identified discussing private information. Companies that have applied for equity refinancing are also encouraged to do buybacks, the people added.
“While the amounts are not huge and mostly symbolic in nature, the fact that they are willing to do buybacks under these hard times shows their strong intention to boost confidence,” said You Lanqiang, fund manager at Pingtan Strategic Asset Management Co. The Shanghai Stock Exchange and China Securities Regulatory Commission didn’t immediately respond to requests for comment.
The raft of buyback plans comes amid concern among investors about a slew of weak economic data and an escalating property crisis. Overseas investors are on their longest selling streak ever of mainland stocks, the tech-heavy Star 50 Index hit its lowest level in 10 months on Thursday, and the Shanghai Composite Index is headed for its worst month since October.