Chinese blue chips unveil aggressive share buy-backs as tariff day looms

Chinese blue chip companies have announced share buy-backs in recent weeks worth billions of yuan, reflecting efforts to shore up stock prices as concerns mount of further downside action after US tariffs on Chinese imports come into effect on Friday.

Home appliance conglomerate Midea Group became the latest blue chip to join the trend, announcing on Thursday morning that it planned to buy back up to 4 billion yuan (US$603.4 million) worth of company shares.

The repurchases will be carried out over the next 12 months at prices below 50 yuan per share, according to a filing made to the Shenzhen Stock Exchange. Media plans to buy at least 80 million shares, accounting for 1.2 per cent of firm’s total equity, the filing said.

Midea, which is also the owner of German robot maker Kuka, said that the decision was “based on confidence in future development and company value”, and that the move “aims to boost investor confidence and protect investors’ interests”.

The announcement helped send Midea’s shares 2.1 per cent higher in Shenzhen on Thursday.

Since the start of the year to the close of trade on Wednesday, the final session before the buy-back announcement, Midea’s shares had fallen 18.6 per cent.

Shanghai listed auto dealership China Grand Automotive Services said on Wednesday night that it would buy back 200 million yuan worth of shares in the next six months at prices below 7 yuan per share.