Chinese share buybacks soar to record high

In today’s newsletter:

• A potential thaw in China-India relations

• North Korea’s alleged involvement in the Ukraine war

• Sikh separatist leader vows to keep fighting India from Toronto

Good morning. Share buybacks on mainland China’s biggest exchanges have soared to a record high this year as Beijing pushes for companies to return cash to shareholders as part of its efforts to revive a flagging stock market.

There have been Rmb235bn ($33bn) in buybacks across mainland-listed shares so far in 2024, more than double last year’s total and far surpassing the previous record of Rmb133bn in 2022, according to Chinese financial data provider Wind.

The rush of share repurchases comes as China’s government unleashes the biggest round of economic stimulus since the Covid-19 pandemic.

The benchmark CSI 300 index has risen more than 20 per cent over the past month amid Beijing’s bid to breathe new life into its equity market after years of dismal performance.

Jason Bedford, a China banking analyst formerly at UBS and asset manager Bridgewater, said Beijing was seeking an equity rally by encouraging buybacks. “Clearly, the government has been pushing this throughout the year,” he said. Read more about the central bank scheme.

• Chinese economy: Beijing unveiled some of its biggest cuts to benchmark lending rates in years as the government stepped up efforts to hit its year-end target of about 5 per cent growth in gross domestic product.

Here’s what else I’m keeping tabs on today:

• Economic data: Hong Kong reports September inflation data and South Korea releases its producer price index.

• Brics summit: Leaders of Brics countries gather in Kazan, Russia. India’s Narendra Modi and China’s Xi Jinping are both due to attend.

• Global economy: The IMF publishes its latest World Economic Outlook, a twice-yearly analysis and projections of economic prospects for the global economy, plus its Global Financial Stability Report.

Five more top stories

1. India and China have reached an agreement on patrolling arrangements along their disputed border, a senior Indian official has said, paving the way for an easing of tensions between the two countries. Clashes between the two sides on the frontier in eastern Ladakh in 2020 left at least 24 troops, mostly Indians, dead.

2. South Korea has called on Russia to stop the deployment of North Korean troops to fight on Moscow’s side in Ukraine, amid allegations by Seoul and Ukraine that North Korean commandos are on Russian territory and preparing for battle. Here’s what we know about Pyongyang’s alleged involvement in the Ukraine conflict.

3. Iran’s currency and stocks have declined and most foreign airlines have suspended flights in anticipation of an Israeli retaliatory attack on the Islamic republic. Many Iranians are now deeply anxious about the prospect of a potential war between Iran and Israel, which has vowed a “precise and deadly” response after Tehran’s ballistic missile strike earlier this month.

4. Disney has appointed former Morgan Stanley boss James Gorman as its chair and announced plans to name a new chief executive in “early 2026”. This is the first time the media giant has set a timeline for the most drawn-out and consequential succession saga in Hollywood.

5. Kamala Harris raised nearly $1bn in the past three months, as she surged past Donald Trump in the money race to amass a huge campaign war chest for the final stretch of the US presidential election. The Democratic candidate pulled in more cash from July to the end of September than the former Republican president has managed since January 2023.

News in-depth

Inderjeet Singh Gosal says he is not afraid to die for an independent Sikh homeland in India’s Punjab region. The 35-year-old’s declaration sounds incongruous as he sits in his comfortable home in Toronto’s suburbs. But after the assassination of Hardeep Singh Nijjar, his predecessor as head of the Khalistan movement, the risk is real. The fatal shooting of Nijjar in Vancouver last year has led to increasingly fraught relations between Ottawa and New Delhi.

We’re also reading . . . 

• What the world thinks of Harris vs Trump: Strongman leaders around the globe would welcome a victory for the Republican former president, writes Gideon Rachman.

• Lebanon’s sectarian tensions: Israel’s bombing campaign threatens the delicate balance between Lebanon’s three main religious groups.

• Buy now, pay later: The fast-growing consumer finance phenomenon has cut form-filling and lengthy credit checks for households in need of borrowing. But its very frictionlessness heightens the potential for debt to spiral, writes Patrick Jenkins.

Chart of the day

Trading in the world’s second-largest IPO of 2024 begins today, but retail investors have already given a lukewarm reception to the $3.3bn listing of Hyundai Motor India, amid a slowdown in car sales in the country. The weak early bidding for Hyundai’s Mumbai offering was in contrast to other blockbuster floats this year in India, with its stock market becoming the world’s largest listing venue outside the US.

Take a break from the news

Sunreef Yachts began in the same Lenin shipyard in Gdańsk where Lech Wałęsa previously worked and started the Solidarity opposition movement that helped topple Poland’s communist regime. Back then it was aimed primarily at middle-class buyers. Now it is producing luxury catamarans for clients including Rafael Nadal and Julio Iglesias.

Additional contributions from Gordon Smith and Irwin Cruz