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Majority shareholders in buyback boom

By Yu Hongyan (chinadaily.com.cn)
Updated: 2010-05-19 17:39

Majority shareholders are in a buyback boom amid China's sluggish market, the China Business News reported Wednesday.

As of May 18, majority shareholders of 19 listed companies spent as much as 3.27 billion yuan buying back their stocks on the secondary market, according to statistics from Financial China Information & Technology Co.

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Meanwhile, senior executives of 10 companies also opened their purses to buy stocks of their own companies on the secondary market.

Analysts say a listed firm will buy back its stocks on the market if they are undervalued, or if it plans to stabilize its share price for further financing needs, such as an additional issue, or share allotments.

The size of the buyback boom this year, however, is relatively small compared with that at the end of 2008, said Wang Weijun, analyst with Zheshang Securities.