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More Chinese state companies announce share purchases in a sinking market

Published 10/19/2023, 08:14 AM
Updated 10/19/2023, 08:16 AM
© Reuters. FILE PHOTO: A man wearing a protective mask is seen inside the Shanghai Stock Exchange building, as the country is hit by a new coronavirus outbreak, at the Pudong financial district in Shanghai, China February 28, 2020. REUTERS/Aly Song/File Photo
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SHANGHAI/SINGAPORE (Reuters) - At least seven listed companies owned by China's central government said late on Thursday that their controlling shareholders planned to increase holdings or buy back shares, as Beijing steps up efforts to stabilise sinking stocks.

The announcements by the companies, including China State Construction Engineering Corp and Aluminum Corp of China, came just days after 10 other central state-owned enterprises (SOEs) unveiled similar share purchase plans.

They also follow 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.

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 include China Shenhua Energy Co, GD Power Development Co and China National Nuclear Power Co.

© Reuters. FILE PHOTO: A man wearing a protective mask is seen inside the Shanghai Stock Exchange building, as the country is hit by a new coronavirus outbreak, at the Pudong financial district in Shanghai, China February 28, 2020. REUTERS/Aly Song/File Photo

"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.

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