Hong Kong stocks repurchase amount exceeds HK$200 billion this year, and these four companies are at the top.
Jiemian.com
By Liu Chenguang LCG
Excerpt
Drew Bernstein, co-founder and co-chairman of Marcum Asia, pointed out that it is very common for financial companies to repurchase stocks because they are often very proficient in managing capital structure. Assuming that management is prudent, stock repurchases mean that the company has sufficient capital base to maintain the business, comply with regulatory requirements and maintain dividends. However, if the stock repurchase is accompanied by excessive debt levels, it may be a dangerous signal. In addition, he believes that for technology companies, stock repurchases can sometimes be an extraordinary means to boost investor confidence. It may also mean that the company is entering a more mature stage, in which the cash generated by the company’s predictable “cash cow” business exceeds the cost of executing its strategy.