The first half of 2024 has been full of excitement, with opportunities and risks coexisting in the global investment market - the AI boom continues, with Microsoft, Apple, and Nvidia vying for the top spot in market capitalization, and the Fed's interest rate cut expectations still uncertain... For investors who are also witnesses of a large era, the situation is exciting.
Looking back at the past and accumulating experience, welcome to subscribe to the exclusive semi-annual review of 2024. May all our efforts in the first half of the year be the groundwork for the surprises in the second half of the year."2024 Exclusive Mid-Year Review", may all our efforts in the first half of the year be the groundwork for the surprises in the second half of the year.
Since the beginning of this year, the stock buyback activity in the Hong Kong stock market has continued to heat up. According to Wind data, as of June 20th, 176 Hong Kong stocks have conducted buybacks this year, with a total amount of over HKD 113.4 billion. The total buyback amount has exceeded HKD 100 billion before the halfway mark of the year, and is expected to break the annual buyback record of over HKD 120 billion in 2023, setting a new historical high.
Tencent spent more than HKD 46.3 billion to keep its position as the "buyback king".
As of June 20th, there are a total of 13 companies whose buyback amount is over HKD 1 billion, and 4 companies whose buyback amount is over HKD 10 billion. They are:$TENCENT (00700.HK)$, $HSBC HOLDINGS (00005.HK)$, $AIA (01299.HK)$and $MEITUAN-W (03690.HK)$.
Among them, Tencent is firmly at the top, with a buyback amount of up to HKD 46.3 billion so far this year, more than three times the amount in the same period last year. The company has announced buybacks on 50 trading days this year, and 42 of them have a buyback amount of over HKD 1 billion. Among these 50 buybacks, the lowest daily buyback price was HKD 274.61, and the highest was HKD 395.36.
Previously, Tencent announced during its performance release on March 20th that it plans to spend over HKD 100 billion to repurchase shares this year, which is at least double the buyback quota in 2023. It is worth mentioning that Tencent's buyback amount in 2023 was as high as HKD 49 billion, surpassing the total buyback amount in the past decade.
Tencent and Meituan aside, other Hong Kong technology stocks have also joined the buyback frenzy,$XIAOMI-W (01810.HK)$, $KUAISHOU-W (01024.HK)$with this year's buyback amounts reaching HKD 2.6 billion and HKD 1.8 billion respectively.
New rules for inventory stocks have landed! More convenient for companies to initiate buybacks.
Since last year, the Hong Kong Stock Exchange has reformed the buyback mechanism to facilitate Hong Kong-listed companies' buybacks.
In April this year, the Hong Kong Stock Exchange revised and issued the "Listing Rules", introducing new inventory share mechanisms. The new rules for inventory stocks officially came into effect on June 11th. The new rules for inventory stocks specify that listed companies can apply for exemptions and conduct share buybacks during the quiet period before performance announcements. It is worth mentioning that under the new rules, the shares repurchased by listed companies do not need to be cancelled, and the buyback activities may reach a new level in the future.
The Hong Kong Stock Exchange stated that listed companies can use inventory shares to stabilize stock prices. When the stock price is low, the issuer can repurchase company shares and turn them into inventory shares, sending a signal to the market that their shares are undervalued and boosting market confidence. Industry insiders expect that the new rules for inventory stocks will help to increase the enthusiasm and flexibility of Hong Kong-listed companies in conducting share buybacks, and further enhance the overall shareholder return level of Hong Kong stocks.
The heat of the Hong Kong buyback frenzy has not diminished, demonstrating companies' confidence in stock prices and long-term development. At the same time, institutions generally remain bullish on the performance of the Hong Kong stock market in the second half of the year.
Swhy stated that the current combination of "the bottoming out of corporate profit expectations, the return of risk preferences to neutrality, the continued underallocation of overseas funds, the continuous inflow of Hong Kong stock connect capital, and net buybacks supporting the overall liquidity" in the market has clear downside protection. If catalysts such as improvement in fundamental expectations, a decline in risk-free interest rates, and market mechanism reforms appear in the second half of the year, the upward trend of Hong Kong stocks is still to be expected. Under the neutral hypothesis, it is expected that the Hang Seng Index still has an upward space of 11% this year.
The mid-year inventory and sharing activity is coming in full force. In the first half of 2024, the stock market is booming. What stock market opportunities have you taken advantage of?
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