When the market adjusts, listed companies tend to actively implementshare repurchaseplan, boost market confidence, and pass on the concept of value investment. according to”securitiesDaily reporter statistics, as of March 18, the Shanghai and Shenzhen Stock Exchanges have released nearly 2,000 copies of this year.reporelated listingsCompany Announcementthere were 651 buybacks in March aloneannouncementdisclosure.
The reporter learned that while listed companies are actively repurchasing shares to “protect the market”, the public offeringfund companyThey also took action and began to purchase the company’s equity classes by themselves.fundincreasing investor confidence and releasing positive signals to the market.
Repurchase boosts listed companies
Improve long-term incentive mechanism
The special meeting of the Financial Committee of the State Council held on March 16 gave the capital market a “reassuring pill”. The Party Committee of the China Securities Regulatory Commission quickly convened an enlarged meeting to convey the spirit of the study meeting, and made research arrangements for the implementation. The meeting emphasized that the role of the market’s endogenous stability mechanism should be brought into play, the quality of listed companies should be vigorously promoted, listed companies should be encouraged to increase their holdings and repurchases, and fund companies should be guided to purchase their own shares. Improve the institutional mechanism that is conducive to long-term institutional investors to participate in the capital market, increase the cultivation of various institutional investors such as public funds, and encourage long-term investment and value investment.
Through stock acquisition, listed companies can convey to investors the company’s confidence in future development, thereby promoting the matching of the company’s stock market price with its intrinsic value.If there is a large decline or volatility in the stock in the short term, the listed company can show investors its recognition of the company’s value by repurchasing shares, thereby stabilizing the stock price, maintaining the company’s value andshareholderrights and interests.
E.g,SF HoldingAfter the announcement on the repurchase of the company’s shares, AnxinsecuritiespostedResearch reportjust mentioned,SF HoldingThe “repurchase + incentive” of the company fully demonstrates development confidence, helps to further improve the company’s long-term incentive mechanism, fully mobilize the enthusiasm of core backbones and outstanding employees, and the company’s medium-term development goals are expected to be clear, which can not only ensure the company’s long-term stable development, but also Further build confidence in the capital market.
Chuan CaisecuritiesChen Li, chief economist and director of the research institute, told the “Securities Daily” reporter that since the beginning of this year, A-shares have undergone a relatively large adjustment.Fixed voteinvestor confidence.and companies in the pharmaceutical, electronics and chemical sectorsperformancePerforming well in 2021, some companies feel that the stock price deviates from their own company value, and will actively carry out repurchase operations based on optimistic expectations of company performance.
According to Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology, the repurchase of shares by listed companies shows that the company has idle funds and demonstrates the company’s financial strength. Since the repurchased shares cannot be sold again, the listed company can be used for equity incentives or for the conversion of bonds, etc., which will reduce the company’s tradable shares, increase the company’s earnings per share, benefit the company’s long-term development, and deliver value. investment concept.
It is worth mentioning that while many listed companies repurchase shares with their own funds, many listed companies repurchase shares by issuing bonds, such asSouthern Media、Shanying InternationalandCMOCA number of listed companies, including others, have announced that they plan to issue corporate bonds to repurchase the company’s shares.CMOCIn the announcement, it is planned that part of the bond issuance funds will be used to repurchase shares, and these shares will be used to implement equity incentives, employee stock ownership plans or methods permitted by laws and regulations in the future.
National Porcelain MaterialsXu Shaomei, secretary of the board of directors, said in an interview with a reporter from “Securities Daily” that by repurchasing the company’s shares for equity incentives, the company has established a perfect long-term incentive and restraint mechanism, improved team cohesion and competitiveness, fully mobilized the enthusiasm of employees, and promoted The company continues to develop healthily.
Public fund companies purchase their own funds
Align with the interests of the holders
While listed companies are actively repurchasing shares to “protect the market”, public fund companies have also taken action and began to buy their own equity funds.
recently,Tianhong Fund、E Fund Fund、BOCOM Schroders FundA number of public fund companies have successively released announcements of self-purchasing companies’ equity funds. For example, on March 17, Tianhong Fund issued an announcement on “Using its own funds to invest in its public funds”. The announcement shows that Tianhong Fund, based on its firm confidence in the long-term, healthy and stable development of China’s capital market, and with the majority of fund share holders, will use its own capital of 100 million yuan to subscribe for its partial stock public offering fund on March 17, 2022. And promise to hold for not less than 1 year.
In this regard, Tianhong Fund stated that Tianhong Fund has been continuously cooperating with the majority of holders through self-purchase of large amounts of inherent funds, helping investors to realize long-term investment and value investment, and sharing the development dividends of China’s capital market.
“Although the economic and financial situation at the beginning of 2022 is unexpectedly complicated, we are pleasantly surprised to see that the supply advantages of the Chinese economy and the competitive advantages of Chinese enterprises are still strengthening.” Bank of Communications Schroders Fund told investors in the form of an open letter, Decided to use the company’s (including wholly-owned subsidiaries) inherent capital of 50 million to subscribe for its partial stock public offering fund again, and promised to hold it for at least three years.
Regarding the fund companies’ “grouping to buy bottoms”, Yang Delong, chief economist of Qianhai Open Source Fund, told the “Securities Daily” reporter that many public fund companies purchase their own funds, and most of them are large public fund companies. In addition to being encouraged and supported by policies , but also hopes to increase investor confidence by aligning with the interests of the holders, and release a signal to the market that they are optimistic about their funds.
“There was a big fluctuation in the market before, and the fall in many stock prices led to the decline of fund shares, which brought losses to investors, and it took some time to restore market confidence. At this time, public fund companies took the initiative to repurchase their funds, It has played an important role in boosting market confidence.” Yang Delong said.
(Article source: Securities Daily)