WuXi Bio, Meituan, Swire and Sands China get US$2.6 billion stock-buying support in Hong Kong to stem market rout
- Just like Meituan, WuXi Biologics and Swire Pacific launch buy-back programmes to help stem stocks rout in Hong Kong
- The Hang Seng Index has lost 17 per cent this year, the worst among major global equity benchmarks, on China slowdown concerns
WuXi Biologics set aside US$600 million to repurchase its shares from the market, according to an exchange filing on Wednesday. The biotech firm suffered a 30 per cent rout in the preceding two days, crashing its market value by US$7.2 billion and dragging the benchmark index to a 13-month low.
“The current trading price of the shares does not reflect their intrinsic value or the actual business prospects of the company,” WuXi Biologics said in its filing. The repurchase plan shows its confidence in its own business outlook and prospects, the firm added.
WuXi Biologics is not alone. Conglomerate Swire Pacific and Macau casino operator Sands China also benefited from signs of market-buying support. These moves mirrored Meituan’s attempt with its US$1 billion repurchase programme, days after its stock was pummelled by signs of slowdown in demand for its services.
The biotech firm, which tumbled 24 per cent on Monday after predicting a bleak business outlook, is valued at 27 times earnings, near a decade low, according to Bloomberg data. The multiples for Meituan and Swire Pacific are 22.9 times and 8.2 times, respectively, also close to decade-lows.
The Hang Seng Index fell this week to the lowest level since mid-November last year, having lost nearly one-tenth of its value from November 15, amid slowdown risks. More than US$628 billion has been erased from the city’s stock market this year, while the Hang Seng Index headed for an precedented fourth year of decline.
