The Insider | As buy-backs head for a historical high in July, will we see a repeat of the 1997 crash?

Buy-back activity on Hong Kong exchange is heading for a historical high this month as the repurchase activity has intensified following the steep drop in the market since June.

A total of 52 companies posted 363 transactions worth a whopping HK$6.73 billion (US$857 million) in the first eight trading days of July. The buy-back figures so far this month are already more than the averages for July from 1992 to 2017 of 24 companies, 211 trades and HK$761 million.

Although the correction in the market started in the second week of June, it took until July for listed firms to ramp up their buy-back activity with an average of 22.3 companies, 40.3 trades and HK$748 million recorded per day from July 3 to 12.

The daily average figures so far this month are sharply higher than the daily average of 13.9 companies, 24.7 trades and HK$391 million from June 8 to 29 and significantly more than the daily averages of 9.9 companies, 16.8 trades and HK$147 million from January to June of this year.

With 13 trading days remaining this month, the buy-back total in July 2018 is fast approaching the record high of HK$8.19 billion in July 2015.