China state firms vow to boost share purchases to calm markets
BEIJING (Reuters) -Several Chinese state holding companies vowed on Tuesday to increase share investment while a slew of listed companies announced share buybacks as Beijing stepped up efforts to stabilise a stock market rocked by U.S. tariff woes.
The announcements by China Chengtong Holdings Group and China Reform Holdings Corp come a day after state fund Central Huijin said it would increase share holdings to steady markets.
China's stock benchmark rebounded in early trade on Tuesday, clawing back some of the 7% plunge from Monday, which was fuelled by trade war and global recession fears.
Washington last week imposed extra tariffs of 34% on China, which then fired back with its own 34% levies on U.S. imports.
Chengtong said its investment units would increase holdings in stocks and exchange-traded funds (ETFs) to safeguard market stability.
"We are firmly optimistic toward the growth prospects of China's capital markets," the state investment firm said in a statement, vowing to support high-quality growth of Chinese listed companies.
China Reform Holdings Corp, also known as Guoxin, said in a separate statement that an investment unit will increase holdings in tech companies, state firms and ETFs, tapping a relending scheme for share buybacks. Initial investment will be 80 billion yuan ($10.95 billion).
Another state holding company, China Electronics Technology Group, said it would boost share buybacks in listed units to bolster investor confidence.
Meanwhile, a growing number of listed companies unveiled plans to buy back shares.
Oil giant Sinopec said its state-owned parent plans to buy its China- and Hong Kong-listed shares worth at least 2 billion yuan over the next 12 months to demonstrate "confidence in future growth prospects."
Orient Securities said it is studying plans to buy back shares in a bid to express optimism and actively protect shareholder interest.
Other listed firms that unveiled share buy-back plans include Intco Recycling Resources Co and Spring Airlines Co. China Pacific Insurance (Group) said it would contribute to market stability by increasing investment in strategic sectors.
State fund Huijin said on Tuesday it has ample liquidity and smooth financing channels to help it suppress abnormal market volatility in its role as market "stabiliser".
"Central Huijin has adequate confidence and competence to resolutely maintain smooth operation of the capital market," Huijin said in a statement.
"We will act decisively when needed."
Separately, China's central bank said on Tuesday it supported Central Huijin Investment increasing its holdings in stock funds.
($1 = 7.3081 yuan)
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