Price slide prompts rash of buy-backs

A number of Hong Kong companies took advantage of the sharp fall on the Hang Seng Index on Monday to buy back their own shares.

While the Hang Seng Index fell 8.69 per cent, some companies, including Henderson Land, Amoy Properties and Dao Heng Bank Group, came into the market to support their share prices.

Credit Lyonnais Securities Edmund Bradley said: 'Among blue chips, buy-backs are very encouraging. Management of these companies usually buys back shares because it believes share values are going to rise.' Companies spent $128.47 million buying their own shares on Monday, with Henderson topping the list with $83.1 million worth of buy-backs.

However, buy-backs are not always good news, Mr Bradley said.

'If they are speculative [non-blue chip] companies, then buy-backs might be seen as a share support measure and not such a good sign.'