What are the rules of Hong Kong stock repurchase stock_Why stock repurchase
Stock repurchase refers to the behavior of listed companies to use cash and other means to repurchase a certain amount of the company's issued shares from the stock market. The following is a small compilation of Hong Kong stock repurchase stock rules, I hope to be able to help you.
What are the rules of Hong Kong stock repurchase stock
1 Hong Kong stock repurchase, the issuer (the company) set up a mechanism not to compete with secondary market traders for profits, and more for the purpose of dragging down the price of the stock. Stocks in the rise or demand exceeds supply, the issuer is not allowed to compete with other investors in the secondary market to buy first; in the need to balance the stock price or oversupply, the issuer repurchase as an additional buyer can only repurchase.
2 The board of directors meeting date and the month before the release of the earnings report, Hong Kong shares are not allowed to buy back shares, only after the board of directors and the release of the earnings report can continue to buy back shares.
3 For each specific repurchase, no new shares are allowed to be issued under the program for 30 days afterward.
4 Hong Kong stock buybacks must be announced on the stock exchange the day after the buyback.
Do Hong Kong shares repurchased have to be canceled
Yes, Hong Kong shares have to be canceled after repurchasing them. After buying back the shares issued by the company, the listed company will need to cancel the part of the shares immediately, the part of the shares canceled will become the listed company's treasury stock to be sealed up. These stocks are essentially private assets of the listed company because they are bought back with the company's cash, and it is likely that they will be used for equity incentives in the future.
After the company retains the repurchased shares as "treasury stock," the shares are still considered to be issued and outstanding, but they will not participate in the calculation of earnings per share and distribution, and in addition to being used for equity incentives, they can also be used to convert into bonds or resold when they are needed for cash flow. When applying for repurchase, Hong Kong stocks need to send an Explanatory Memorandum to shareholders and obtain a general authorization, and then in the following year, you can repurchase the shares.
Why should stocks be repurchased
1, listed companies can be through the stock repurchase, solidify the valuation of the stock base, but also the repurchase of shares to implement equity incentive policies, so that some of the best employees and old employees to enjoy the company's benefits. For example: already listed companies 10 yuan of the outstanding market value of the stock, after the company repurchase to 2 yuan, 3 yuan price to sell to the company's employees to hold shares, so that they enjoy the benefits of the difference in profit at a low price. This practice is to stabilize the military, and after the rapid development of the listed company, can retain more talented people, so that employees together to enjoy the benefits of corporate development, will also allow them to sign a certain number of years of service labor contracts.
2, in the bear market, the stock fell from tens of dollars to a few dollars, or when the short-term decline is larger. Listed companies will often in order to avoid greater losses in the stock, through the stock buyback to stabilize the decline of the stock, and in the secondary market announcement investors the determination of the majority shareholder's holdings, thus reflecting the stock has been overshooting, there are funds began to go out of the way, and here may be the bottom of the short term. In the bear market repurchase shares, in fact, is also the major shareholders in the acquisition of more equity in the future stock rebound, the major shareholders will also announce the news of the reduction in the bottom of the repurchase of the chips sold, which earned the difference will be directly used for the company's business development, which is also a more benign cycle.
3, stock buybacks can reduce the number of external shares outstanding, the major shareholders can concentrate as much as possible to hold shares. This not only reduces the chips of the stock being controlled by the main force, but also allows the company will not be too large due to the loss of equity, and be acquired by other companies, a reasonable adjustment of the shareholding structure, for the management of the listed company is also crucial. Acquisition of listed companies or major shareholders to fight for equity, but also directly in the secondary market for stock repurchases, the purpose of doing so is to increase the proportion of shares, so as to obtain the final "right to speak" of the listed company. This kind of thing is not uncommon in listed companies, major shareholders repurchase shares is sometimes a power struggle, and for the trend of the stock will often be independent of the market.
In summary, we know that the stock repurchase is in the stock market, buy back the company issued outside a certain amount of stock, the company in different stages of the implementation of stock repurchase behavior, its purpose is not the same, so the investor should be clear about why the company wants to buy back.