Here's How Alibaba's Buyback Boost Could Win Back Investors In China's Internet Sector

Alibaba Group Holding Ltd BABA share buyback boost could kickstart a wave of such returns by cash-rich Chinese internet firms, triggering investor curiosity, Bloomberg reports.

Baidu Inc BIDU, JD.com Inc JD, Xiaomi Corp XIACY, and Tencent Holdings Ltd TCEHY shares rallied after Alibaba expecting more share buybacks at scale by the Chinese technology giants.

A Forsyth Barr Asia Ltd analyst saw Tencent and Xiaomi buying back their shares post results given their past practice.

Also Read: JPMorgan Downgrades Alibaba and Other China Tech Stocks Following Selloff; Calls It "Uninvestable" For Next 6-12 Months

Alibaba held $46 billion in cash as of the latest quarter. Tencent and JD.Com could also use their surplus cash for buybacks and boost the value of stocks that have nearly halved in value since their peak last February.

Reducing cash positions would also help minimize excessive liquidity reducing concerns over their ability to utilize capital.

In the U.S., Apple Inc AAPL, Meta Platforms Inc FB, and Microsoft Corp MSFT also expanded their repurchase program by $90 billion in 2021 and bought back over $20 billion worth of stock in each of its recent quarters.

Price Action: BABA shares traded higher by 12% at $115.68 on the last check Tuesday.