Chinese mainland-based developers bought back $560M worth of own shares in July
China Evergrande alone spent $382M buying back its shares
Developers in China are buying back millions worth of shares as markets cool.
The buy-backs come as Beijing has introduced tight regulations for the industry in 30 different mainland markets, sales are slowing and many developers continue to carry large debt loads, according to the South China Morning Post. But observers are skeptical of the developers’ strategy.
“Chinese developers still have a lot of borrowings so their growth will continue to slow. We are not optimistic even if there is going to be some rebound in stock prices after the sharp declines,” Haitong International Securities’ Ruby Wong told the Post. Wong’s view echos many analysts and fund managers’ outlook.
China Evergrande stood out among the ranks of developers buying back shares because it has bought so many of its own shares that it risks being in violation of the stock exchange’s minimum requirements for free float. [SCMP]