After adjustment, the A-share market has rebounded sharply recently. This turning point is that the meeting of the financial committee of the State Council stabilized market confidence. Subsequently, the CSRC mentioned that “encourage listed companies to increase their holdings and repurchase efforts, and guide fund companies to purchase their own shares”, triggering a “repurchase tide” of listed companies.
On March 22, as of the closing, the Shanghai stock index closed at 325986 points, up 0.19%, with a turnover of 402.8 billion yuan (the turnover of the previous trading day was 421.1 billion yuan); Shencheng index closed at 1231878 points, down 0.49%, with a turnover of 560 billion yuan (594.1 billion yuan on the previous trading day); The gem index closed at 268823 points, down 1.39%, with a turnover of 222 billion yuan (244.3 billion yuan on the previous trading day).
The reporter of “daily economic news” found that more than 40 listed companies recently announced to buy back their shares, and many listed companies copied the bottom by subscribing for private fund products.
In this regard, some insiders said that the more repurchase behaviors of listed companies, the more they can reflect the demands of current market value management, and the greater the probability of “market bottom”.
industrial capital subscription private placement products
On March 21, Chongqing Three Gorges Water Conservancy And Electric Power Co.Ltd(600116) announced that the power investment company, a wholly-owned subsidiary of the company, signed the limited partnership agreement of CICC Qichen phase II (Wuxi) emerging industry equity investment fund partnership (limited partnership) as a limited partner, with a subscribed capital contribution of 150 million yuan, accounting for 11.05% of the total subscribed capital as of the date of disclosure of this announcement. The target fund will focus on investing in national strategic emerging industries, take large science and technology and large medical fields as key invested industries, and regularly sort out and adjust key invested sub industries to realize top-down research and layout.
On March 16, Shenzhen Success Electronics Co.Ltd(002289) announced that the company, as a limited partner, contributed RMB 27.135 million to subscribe for some new shares of Suzhou Yuanhe Houwang Changxin 2 venture capital partnership (limited partnership), accounting for 7.8% of the total subscribed shares after the new shares.
On March 15, Fujian Sanmu Group Co.Ltd(000632) announced that Qingdao Yingke Huijin Investment Management Co., Ltd., the holding subsidiary of the company, plans to use its own funds to subscribe for a share of Hangzhou Taifu Yingrui venture capital partnership (limited partnership) managed by Yingke innovation asset management Co., Ltd. of no more than 50 million yuan.
In fact, more and more listed companies have purchased private placement products in the past two years, mainly considering obtaining financial benefits and industrial layout. In the structural market in the past few years, some private placement products have very high returns, and the performance of some listed companies has been significantly improved. At the same time, due to the relatively flexible mechanism of private equity funds, some listed companies also expand their business through private equity products.
For example, on March 15, Lingyi Itech (Guangdong) Company(002600) announced that Shenzhen Dongfang Liangcai precision technology, a wholly-owned subsidiary of the company, signed a partnership agreement with Shanghai Chaoxi private equity fund and jointly invested in Jiaxing Chaoxi hehou equity investment partnership, of which Dongfang Liangcai subscribed 31 million yuan as a limited partner, accounting for 424599%.
bottom establishment requires comprehensive judgment
As the main force of industrial capital, listed companies buy back shares when the market is depressed, which is considered by the market as a signal of the bottom of the market.
In 2018, the A-share market also fell endlessly. Then, after the management released good news, there was a wave of “repurchase tide” of Listed Companies in the market, resulting in a historical bottom. The recent A-share market is also like this. The policy has ushered in great benefits. Will many listed companies buy back shares and walk out of a big bottom in the future?
In this regard, Hao Xinming, manager of Fangxin wealth investment fund, told reporters: “Share repurchases by listed companies show that industrial capital recognizes the company’s current valuation and future prospects, transmits clear confidence to the market and plays a certain supporting role in the company’s stock price. There are nearly 5000 listed companies in the A-share market. The more companies involved in repurchase, the stronger the positive signal. The stock market has its own operation law. At present, the bottom is still early, and the establishment of the bottom requires comprehensive judgment of valuation, sentiment, economic cycle and other factors 。”
“The decline in the market in the early stage is somewhat irrational, reflecting the lack of market confidence. China’s economy still has strong resilience. After the influence of geographical conflicts and epidemic factors subsides, the worries about the economy will be gradually alleviated. The repurchase of shares by listed companies reflects the optimism for the long-term development of the company. The current market position has reached the time when long-term holding can achieve good returns.” Zhou Yi, a researcher at banyan investment, said.
Xia Fengguang, manager of Rongzhi investment fund under private placement paipai.com, believes that: “Share repurchases by listed companies can kill many birds with one stone. On the one hand, they respond to the policy and enhance the confidence of investors. On the other hand, they help to optimize the market value management. At the same time, whether repurchased shares are cancelled or used as inventory for future equity incentives, they will help to improve future performance and enhance the gold content of listed companies’ shares. However, we should also pay attention to the source of funds for repurchase arrangements and the size of repurchase scale of listed companies. Through Generally speaking, at the bottom of the market, the repurchase behavior of listed companies will increase. The more repurchase behavior, the more it can reflect the demands of listed companies on the current market value management, and the greater the probability of “market bottom”
