On July 31, 2026, the Hong Kong stock market witnessed a new "buyback storm." According to the latest data from HKEX, as of July 30, total buybacks by Hong Kong-listed companies this year had reached HK$321 billion, surpassing the full-year 2025 figure of HK$300 billion and hitting an all-time high for the same period. That day, both the Hang Seng Index and the Hang Seng Tech Index closed higher, with analysts widely viewing the buyback wave as a key force supporting the broader market.
Leading companies launched massive buybacks, with Tencent and Meituan in the lead
In this round of buybacks, top new-economy companies unhesitatingly rushed to the forefront. As a bellwether of the Hong Kong stock market, Tencent Holdings has clearly accelerated its buyback pace this year, spending over HK$110 billion to firmly hold the title of "buyback king"; Meituan followed closely with buybacks exceeding HK$30 billion, setting a new high since its listing; short-video giant Kuaishou and internet platform Xiaomi also recorded year-to-date buyback scales of HK$5 billion and HK$8 billion, respectively. Traditional blue chips were equally proactive, with financial stocks such as AIA and HSBC Holdings buying back a combined HK$40 billion, reflecting recognition of current valuations.
By sector, information technology and financials contributed more than 60% of total buyback value. This structural pattern precisely reflects that amid slowing industry growth, large companies prefer to return surplus cash to shareholders to earn long-term investor trust.
Why has the buyback wave heated up again?
Low valuations offer a prime opportunity
Current overall valuations in the Hong Kong stock market remain in a historically low range. The Hang Seng Index's forward price-to-earnings ratio is below 10 times, and its price-to-book ratio has fallen below 1 time. Facing share prices below intrinsic value, listed companies can use buybacks to defend market capitalization while accumulating quality assets at low levels.
Stable operating cash flow
After nearly two years of cost reduction and efficiency gains, tech giants such as Tencent and Meituan maintain strong free cash flow. Meanwhile, with low corporate debt levels and manageable borrowing costs, they have ample capacity to carry out recurring buyback programs.
A combination of regulatory guidance and shareholder demands
HKEX previously revised its Listing Rules to encourage listed companies to announce buyback plans and simplified the buyback and cancellation process. In addition, overseas long-term funds are paying increasing attention to ESG and shareholder returns, which also pushes companies to use buybacks to stabilize short-term share prices.
Can buybacks truly "support the market"?
Historical experience shows that large-scale buybacks can indeed provide positive support for share prices. Taking Tencent as an example, after announcing in March this year that it would raise its buyback quota fivefold, its share price rose over 8% cumulatively in the following ten trading days. For the broader market, buybacks increase buying power and indirectly stabilize market sentiment.
However, it should also be noted that buybacks are not a "panacea." If a company's fundamentals continue to deteriorate, buybacks will only delay the downtrend and cannot reverse a long-term bear market. Moreover, some companies' buyback plans are aimed at offsetting dilution from equity incentives, with limited effect on boosting net assets. Therefore, investors should not simply chase the "buyback concept" but should also assess earnings quality and growth potential.
Can the buyback wave continue in the second half?
Looking ahead to the rest of 2026, multiple investment banks expect the Hong Kong stock buyback boom to persist. On one hand, Hang Seng Index valuations have not fully recovered, so buybacks still offer good cost-effectiveness; on the other hand, the further deepening of the mutual market access mechanism between Mainland China and Hong Kong has created a better market environment for listed companies to buy back and cancel shares. Of course, global macroeconomic uncertainties may prompt some companies to turn cautious, and buyback scale may show a pattern of "leaders continue to increase, while small- and mid-cap stocks diverge."
Implications for Vietnam and Southeast Asian markets
The Hong Kong buyback wave also provides a valuable reference for Southeast Asian capital markets, including Vietnam. Although Vietnam's stock market has developed rapidly in recent years, it still faces problems such as high valuation volatility and an overly high proportion of retail investors. If local listed companies can actively announce buyback plans or increase dividend payout ratios when share prices are depressed, it will not only help protect shareholder rights but also strengthen the confidence of foreign institutional investors. In addition, regulators can learn from HKEX's practices by optimizing share buyback and cancellation rules, promoting the formation of a healthy value-investing culture in the market.
