Baosteel considers more buyback on falling stock prices
The stagnant market in
China caused Baoshan Iron & Steel Company's (
Baosteel) stock price to drop 17 percent since its listing on the stock exchange in April.
Baosteel's stocks were listed on the stock exchange as a part of the Beijing's program to release the stocks of certain state-owned companies in order to reduce the burden on the government's shoulders.
Baosteel has spent nearly $250 million to date buying back some of its shares.
Yesterday,
Baosteel indicated that its parent company was ready to spend another $250 million to buy back stocks over the next six months if the price remains below RMB 4.53 ($0.56) per share. The stock price of the company gained 0.95 percent after the announcement to close at RMB 4.26 ($0.53).
If the company spends the other $250 million, the total buyback will reach 900 million shares. The company had listed 5 billion shares on Shanghai Stock Exchange on 26 April 2005 with an initial price of RMB 5.12 (0.63$).