August 2, 2012 / 1:42 AM / 6 years ago

China regulator urges some blue chips to buy back shares: report

SHANGHAI (Reuters) - China’s securities regulator is encouraging companies whose share price has fallen below net asset value per share, including blue chip firms such as Bank of Communications (601328.SS) and Baosteel (600019.SS), to buy back their shares, an official newspaper reported on Thursday.

Analysts have said efforts by the China Securities Regulatory Commission (CSRC) to encourage companies with strong cash positions to buy back shares could boost confidence in the stock market, which has slumped to 3-1/2 year lows this week.

An unidentified CSRC official was quoted by the official Shanghai Securities News on Thursday as saying companies whose shares are trading below net asset value per share with growth potential and strong finances have “greater obligations” to consider a buyback.

There are 71 mainland-listed companies whose share price is currently trading below net asset value per share, including blue chips such as Shanghai Pudong Development Bank (600000.SS), China Communications Construction Co Ltd (601800.SS) and China Railway Group Ltd (601390.SS), according to the report.

Reporting by Kazunori Takada and Chen Yixin; Editing by Edmund Klamann

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