More Chinese state operations were poised to increase their holdings, or buy back shares, in their own companies as Beijing orchestrates a plan to stabilise its sinking stock market.
The move was announced by at least seven listed companies owned by China’s central government late on Thursday.
The list included China State Construction Engineering Corp and Aluminum Corp of China, and comes just days after 10 other central state-owned enterprises (SOEs) unveiled similar share purchase plans.
It also follows moves by China’s state fund Central Huijin Investment Ltd to increase stakes in China’s “Big Four” state banks, as well as a slew of other supportive measures that have so far failed to revive a flagging stock market.
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China’s bluechip CSI300 Index slumped more than 2% on Thursday to 11-month lows amid heavy foreign selling, even after Wednesday’s release of better-than-expected economic data.
Other companies that announced share purchase plans on Thursday included China Shenhua Energy Co, GD Power Development Co and China National Nuclear Power Co.
“We see Beijing’s measures to boost equity market sentiment having limited impact … as investors are more focused on improvements in the real economy and company earnings before making a decisive longer term allocation to Chinese equities,” said Gary Tan, portfolio manager at Allspring Global Investments.
However, “we view the Chinese equity market being closer to the bottom,” Tan said, citing low valuation and increasingly appealing dividend yields.
- Reuters with additional editing by Sean O’Meara
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