During the market's ups and downs, stock buybacks by Hong Kong-listed companies have surged.
According to Hang Seng Indexes Company's statement on Tuesday, the scale of stock buybacks in the Hong Kong stock market has reached HKD 73.5 billion so far this year, accounting for 70% of the total buybacks in 2022. It is expected that the total buyback scale in 2023 will reach HKD 92.9 billion, approximately 3.9 times the average buybacks of the previous five years.
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The wave of stock buybacks in the Hong Kong stock market began during last year's market downturn. In 2022, the Hang Seng Index fell by a cumulative 18%, while corporate buybacks reached HKD 104.9 billion, a year-on-year increase of 175%, which is 4.4 times the average buybacks of the previous five years.
So far this year, the Hang Seng Index has fallen by approximately 9%, and the wave of corporate buybacks has continued to hover at historical highs.
Hang Seng Indexes Company stated in the article:
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&#34;This unusually high level of buybacks may reflect the belief of companies that the value of their stocks listed in Hong Kong is undervalued.&#34;
</blockquote>
The potential motivations for corporate buybacks are usually related to their capital structure, financing costs, and excess cash levels. Generally, when companies believe that their listed stocks are currently undervalued and expect significant revaluation in the future, they will engage in stock buybacks to support stock prices, improve financial conditions, and enhance shareholder returns.

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Companies believe that the value of their stocks listed in Hong Kong is undervalued.

Hong Kong Stock Buybacks Surge!