JD.com's stock price rises after announcing a $5 billion share buyback, despite a decline in the Hang Seng index.
- On Wednesday, JD.com's stock price increased by approximately 1.2%, while the Hang Seng Index decreased by 0.82%.
- JD.com has announced its second buyback of the year, following a $3 billion buyback in March.
On Wednesday, the Hong Kong-listed shares of the Chinese online retailer increased by 1.2%, surpassing the decline on the Hang Seng Index after the company announced a $5 billion buyback the previous day.
On Tuesday, U.S. shares of the firm increased by 2.24% after the announcement. Despite this, both JD.com's Hong Kong and U.S. shares have fallen approximately 20% year to date.
Although Hong Kong's Hang Seng index decreased by 0.82% on Wednesday, it has increased by approximately 4% year-to-date.
JD.com has announced its second buyback of the year, following a $3 billion buyback in March.
Chelsey Tam, senior equity analyst at Morningstar, stated that the decision to announce a share buyback is not surprising, as it is a common practice in China when share prices and growth are low.
Another Chinese e-commerce player, Tam, increased its share buyback program last week, as pointed out by him.
China's e-commerce sector has been dogged by a slow domestic economy.
Alibaba's second-quarter results fell short of expectations on both revenue and earnings per share, while Pinduoduo experienced its worst-ever trading session after missing revenue and earnings per share expectations.
In February, Alibaba announced a $25 billion share buyback after missing revenue targets for the fourth quarter of 2023.
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