, Columnist
Why Investors Should Fear China’s Buyback Wave
Repurchases are a sign of weakness, not strength.
Not buying it.
Photograph: VCG/Getty Images
This article is for subscribers only.
Companies returning cash to shareholders have helped propel the U.S. stock market to a record bull run this year. In China, investors take fright when their firms do the same.
This year, more than 700 Chinese firms, or about 20 percent of actively traded stocks, have announced plans to spend money on their own shares. The 24 billion yuan ($3.5 billion) shelled out so far is just shy of the past three years combined. Yet the bear market has only deepened.