China’s stock markets experienced a significant rebound today following numerous public companies announcing plans to increase shareholder stakes or repurchase shares. These moves come after two major state-owned capital operation firms revealed they invested around CNY60 billion (approximately USD8.9 billion) to stabilize the market.
The Shanghai Composite Index rose by 1.8%, closing at 3,864.37 points, while the Shenzhen Component Index surged 4.8% to finish at 14,264.29 points. Meanwhile, the Nasdaq-style ChiNext and the Star Market indexes jumped 7.1% and 8.8%, reaching 3,685.97 and 2,060.48 points, respectively.
Yesterday, about ten companies listed in mainland China announced plans to increase shareholder holdings. Notably, China State Construction Engineering disclosed that its controlling shareholder plans to invest between CNY500 million (around USD73.9 million) and CNY1 billion over the next year to buy more shares.
EVE Energy’s CEO and director, Liu Jianhua, intends to purchase an additional 100,000 shares within six months. Based on the company’s latest stock price, this transaction could be valued at over CNY5 million (roughly USD738,980).
Additionally, 30 more firms revealed preliminary share buyback plans or proposals. For instance, Huayou Cobalt aims to repurchase shares worth between CNY600 million (approximate USD88.6 million) and CNY1 billion, while Three-Circle Group, an electronic components and materials provider, announced a buyback plan ranging from CNY450 million to CNY900 million.
To invigorate the currently sluggish stock market, China Reform Holdings and China Chengtong Holdings Group—both under the authority of the State-Owned Assets Supervision and Administration Commission—announced investments of roughly CNY50 billion (about USD7.4 billion) and CNY10 billion, respectively, to acquire more shares in state-owned listed companies.
This led several other state-owned enterprises, such as China Three Gorges Renewables Group and Aluminum Corporation of China, to declare shareholding increase plans yesterday morning.
Last week, the Shanghai Composite Index dropped 5.8%, and the Shenzhen Component Index fell 8.9%. The ChiNext and Star Market indexes declined by 10.8% and 17.5%, respectively, marking their most substantial weekly losses this year.