Hong Kong stocks enter a "crazy surge" mode, which of the 2626 listed companies are still repurchasing shares?

Since mid-September, the Hong Kong stock market has experienced a general rise.

According to the Wisdom Financial APP, since September 11th, the Hang Seng Index has maintained a continuous upward trend for 12 consecutive days, with the index rising by about 21%. On September 27th, the Hong Kong stock market achieved a record-breaking trading volume, with all three major indexes hitting new highs for the year, and the market turnover reaching HKD 445.748 billion, setting a new record.

As of the close on the 27th, the Hang Seng Index successfully surpassed the 20,000-point mark, closing up by 3.55% or 707.72 points, reaching a new high for the rebound this year at 20,632.3 points; pharmaceutical stocks, dairy stocks, Chinese brokerage stocks, and property stocks performed well.

It is worth mentioning that since mid-September, the Hong Kong Stock Exchange has risen by nearly 33%; in the afternoon of the 27th, it surged by nearly 10% to HKD 305.6 at one point, reaching a new high since August 2023, fully demonstrating the attitude of funds and a significant improvement in market sentiment.

Fed rate cuts and multiple heavyweight positive policies "ignite" the general rise in Hong Kong stocks

Behind the soaring market lies the recent 50 basis point rate cut by the Federal Reserve and multiple heavyweight positive policies such as domestic reserve requirement cuts and interest rate cuts.

Recently, the Federal Reserve made a significant 50 basis point rate cut. According to the Fed's forecast, the federal funds rate at the end of this year will reach 4.4%, within the target range of 4.25% to 4.5%, and is expected to drop to 3.4% by 2025 and further to 2.9% by 2026.

Analysts pointed out that as the Fed initiates rate cuts, the monetary policy space of various central banks further opens up. Fed rate cuts help alleviate capital outflows and exchange rate fluctuations in countries other than the United States, promoting economic growth.

In a lower interest rate market environment, the cost of capital is reduced, which helps attract more funds into the Hong Kong market, boost market sentiment, and drive stock market gains.

On the other hand, on September 24th, the Governor of the People's Bank of China, Pan Gongsheng, announced multiple heavyweight policies, including reserve requirement cuts, interest rate cuts, and reductions in existing housing loan rates, attracting high market attention.

On September 26th, the Political Bureau of the CPC Central Committee held a meeting, mentioning the need to increase the counter-cyclical adjustment of fiscal and monetary policies, ensure necessary fiscal expenditures, effectively carry out grassroots "three guarantees" work, make efforts to boost the capital market, vigorously guide the entry of medium and long-term funds into the market, and remove barriers for social security, insurance, wealth management, and other funds to enter the market. Support the merger and reorganization of listed companies, steadily promote the reform of public funds, and study and introduce policy measures to protect small and medium investors.

On the 27th, the much-anticipated reserve requirement cuts and interest rate cuts were officially implemented. The People's Bank of China issued an announcement, lowering the reserve requirement ratio for financial institutions by 0.5 percentage points (excluding financial institutions that have already implemented a 5% reserve requirement ratio); the 7-day reverse repurchase operation rate in the open market was adjusted from the previous 1.70% to 1.50%. The operation rates for 14-day reverse repurchase and temporary reverse and positive repurchase operations in the open market continue to be determined by adding or subtracting points from the 7-day reverse repurchase operation rate, with the magnitude of the adjustment remaining unchanged.

The number of share buyback companies in 2024 reaches a near-year high, with 123 companies still in the process of buyback in the near term

Recently, the market sentiment in the Hong Kong stock market has significantly improved, contrasting sharply with the first half of 2024 From September 24th to 26th, the turnover of the Hong Kong stock market reached HKD 242.3 billion, HKD 254.8 billion, and HKD 302.9 billion respectively. On the 27th, it even broke through HKD 445.748 billion, setting a new historical high. Compared to the first half of 2024, the average daily turnover of the Hong Kong stock market was only HKD 110.4 billion.

In the first half of this year, the Hang Seng Index accumulated a 3.94% increase, and as of the close on the 27th, the Hang Seng Index has risen by 20.4% from the opening price at the beginning of the year.

In the previously relatively sluggish and volatile market conditions, many companies chose to repurchase their publicly traded shares. According to data from the Wise Finance APP, since 2024, out of all 2626 Hong Kong-listed companies, approximately 239 companies have participated in share repurchases.

In comparison, the number of Hong Kong-listed companies participating in share repurchases in 2021, 2022, and 2023 were 186, 217, and 197 respectively.

It is worth mentioning that companies generally choose to buy back shares when the market is sluggish, which is a common practice in the market. However, when the market is on an upward trend, continuing to repurchase shares actually demonstrates the management's confidence in the company's value and future development.

According to the Wise Finance APP, in the past few trading days since September 10th, there are still quite a few companies choosing to repurchase their own shares. Out of the 239 companies that have engaged in share repurchases this year, 123 companies have continued to repurchase their shares.

Among them, based on the cumulative repurchase amount since September 10th, the top 5 companies with the highest repurchase amounts are Tencent Holdings (00700), Meituan-W (03690), HSBC Holdings (00005), AIA Group (01299), and Kuaishou-W (01024), with repurchase amounts of approximately HKD 10.718 billion, HKD 3.229 billion, HKD 2.294 billion, HKD 1.261 billion, and HKD 0.41 billion respectively.

So far this year, the repurchase scale of these 5 listed companies has reached HKD 88.112 billion, HKD 27.696 billion, HKD 31.871 billion, HKD 24.175 billion, and HKD 3.944 billion respectively.

In terms of industry distribution, among the top 20 companies with the highest repurchase amounts, the non-essential consumer industry has the highest repurchase amount, followed by the information technology, financial, energy, and healthcare industries.

Furthermore, based on the calculation of the proportion of repurchased shares to the circulating share capital, the top 5 companies with the highest repurchase proportions since September 10th are Concord Medical Services (02120), Shenglong Jinxiu International (08481), Link Health Group (00690), China Xuyang Group (01907), and Puhua Heshun (01358), with repurchase proportions of 2.54%, 2.46%, 1.16%, 0.97%, and 0.95% respectively Since the beginning of this year, the proportion of share repurchases by the above 5 listed companies as a percentage of total outstanding shares are 7.06%, 6.68%, 3.22%, 2.77%, and 2.73% respectively. In terms of industry distribution, the healthcare industry accounts for the highest proportion among the top 20 companies, reaching 37%; followed by the non-essential consumer goods industry, accounting for 21%.

Among the 123 listed companies that have engaged in share repurchases since September 10th, the non-essential consumer goods industry has the highest proportion, with 31 companies (25%); followed by the healthcare industry with 28 companies (23%); the financial industry, information technology industry, and real estate construction industry have 11 companies (9%), 9 companies (7%), and 8 companies (6%) respectively.

It is worth mentioning that with the implementation of favorable policies such as lowering the interest rates on existing home mortgages, Hong Kong stocks in the real estate sector have collectively strengthened recently. During the period of strong performance in the Hong Kong stock market since September 10th, companies such as Swire Properties (01972), Vanda Cloud (02602), Yuexiu Services (06626), and Jinke Services (09666) have continued to repurchase their own shares.

The market is expecting a series of favorable policies to be implemented, which will drive Chinese assets into a "crazy" mode. Morgan Stanley China recently stated in a research report that the recent comprehensive measures to stabilize the market in China are unprecedented in the history of the Chinese stock market. It is expected that both the A-share and Hong Kong stock markets will respond positively to the policies and may experience a tactical rebound in the near term, potentially outperforming emerging markets.

The bottoming characteristics of the Hong Kong stock market are once again evident, with Citic Securities making a prediction that the valuation recovery trend in the Hong Kong stock market is expected to continue until early November, with growth styles likely to continue to outperform dividend strategies.

As the market enters an uptrend, companies that continue to repurchase their own shares deserve more attention