China Petroleum & Chemical Corporation, or Sinopec Ltd, is a Beijing-based oil and gas company which is listed in Hong Kong, Shanghai and New York (NYSE: SNP). It is one of the world’s biggest companies by revenue. Sinopec Ltd’s parent, Sinopec Group is one of China’s biggest petroleum groups.
China Petrochemical to buy back 2pc stake in Sinopec
Reuters in Shanghai
China Petrochemical, parent of Shanghai- and Hong Kong-listed oil giant Sinopec, plans to spend up to about HK$136 billion to buy back a 2 per cent stake in the subsidiary over the next year, in an apparent move to support the mainland’s sagging stock market.
The state-owned parent started the purchase on Tuesday, buying 6.06 million shares, or 0.005 per cent of the listed arm, in Shanghai, Sinopec said in a filing to the Shanghai Stock Exchange dated Wednesday.
A 2 per cent stake amounts to 2.33 billion shares, based on Sinopec’s total capital base of 116.6 billion shares. Its Shanghai-listed, yuan-denominated A shares closed at 4.62 yuan per share on Tuesday. Based on these calculations, the parent could spend as much as 107.7 billion yuan (HK$136 billion).
Chinese regulators have publicly urged major shareholders and parent companies of China’s major listed firms to buy back shares to support a weak stock market. The Shanghai Composite Index has lost about two-thirds of its value since late 2007, when the global financial crisis flared up.
In response to the official appeal, China’s Central Huijin Investment, the government’s main holding firm for state-owned financial companies, has continuously bought A shares in the country’s top four state-owned banks over the past year, according to company statements.
The Big Four are Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China.
Baosteel Corp, the state-owned parent of China’s top steel mill, Baoshan Iron and Steel, spent 1 billion yuan to cumulatively buy a 1.2 per cent stake in its listed arm over the 12 months to October last year, the firm said.
Among other steps to boost stock market sentiment, the China Securities Regulatory Commission suspended stock initial public offerings one year ago.