In recent times, a number of listed companies have announced share buyback programs and plans for major shareholders to increase their holdings, signaling strong confidence in the firms' long-term growth prospects and intrinsic value with tangible capital.
Against a backdrop of enhanced policy support and an improving market environment, buybacks and share purchases are becoming key tools for listed companies to refine their market value management and enhance investment appeal, consistently sending positive signals to the market.
Data from Wind shows that since the start of this year, A-share listed companies have collectively disclosed 1,766 instances of share buyback plans that have been implemented, along with 849 plans for major shareholders to increase holdings, including those already completed and those intended.
"On one hand, actions by listed companies to repurchase shares and for major shareholders to buy more can stabilize investor confidence, showing that company management endorses the firm's long-term value," said Yang Delong, Chief Economist and Fund Manager at Qianhai Kaiyuan Fund. "On the other hand, share repurchases can reduce the number of shares in circulation, which helps improve earnings per share and further enhances the investment value of the listed company."
Since the beginning of the year, many leading listed companies have actively implemented large-scale buybacks. Tian Lihui, a Finance Professor at Nankai University, noted that buybacks with cancellation directly optimize capital allocation efficiency, increase the return on equity per unit of capital, and represent a return to value investing.
It is noteworthy that since the start of July, the enthusiasm for share buybacks among listed companies has continued to rise sharply. This sustained increase in buyback activity is underpinned by strong policy support.
The stock repurchase and share purchase relending facility established in 2024 guides financial institutions to provide loans to listed companies and their major shareholders, encouraging firms to actively use tools like buybacks and insider purchases for market value management.
Since the implementation of the stock repurchase and share purchase relending, the market response has been positive. Taking the Shenzhen market as an example, 448 listed companies and their major shareholders have obtained commitment letters for special loans for stock repurchases and share purchases, with a total loan quota of 114.339 billion yuan.
Yang Delong stated that for some listed companies with relatively limited cash on their balance sheets, the stock repurchase and share purchase relending effectively addresses their funding sources for buybacks. This enables listed companies to implement share repurchases more conveniently, which is conducive to boosting market confidence and promoting the stable operation of the capital market.
Looking ahead to the second half of the year, experts interviewed anticipate that share buybacks by listed companies and share purchases by major shareholders will remain highly active.
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