SHANGHAI/HONG KONG - Chinese listed companies are rushing to buy back shares and lift dividends as they respond to regulators' calls that echo reform efforts in Japan and South Korea, driving a welcome rally even if investors doubt that broader governance changes are afoot.China-listed firms announced record cash dividends totalling 2.2 trillion yuan for 2023 despite a fall in combined profit, official data shows. Over 100 listed companies returned money to investors for the first time.
They have also drawn comparisons with the Tokyo Stock Exchange's push for capital efficiency that drove the Nikkei to record highs. In Japan, firms have begun to unwind strategic shareholdings as part of ongoing reforms to be more market-oriented. This mimics Japan's corporate reform and South Korea's"Value Up" program, said John Pinkel, partner of New-York-based hedge fund Indus Capital, which recently added China exposure.
In addition, companies including Chongqing DIMA Industry Co, SafBon Water Service and Infund Holding Co scrambled to unveil share buyback plans after warnings by stock exchanges that they could be delisted if their share prices traded at persistently low levels.