JD.com shares rise after it announced a $5 billion share buyback

Hong Kong-listed shares of the Chinese online retailer JD.com rose 1.2% on Wednesday, outpacing the decline of Hang Seng Index after the firm announced a $5 billion buyback late Tuesday.

Shares in the US-listed company rose 2.24% on Tuesday after the announcement. Both Hong Kong and US shares of JD.com are down about 20% year to date.

In comparison, Hong Kong’s benchmark Hang Seng index fell about 0.82 percent on Wednesday but is up about 4 percent for the year to date.

The announcement is JD.com’s second buyback this year, after it announced a $3 billion buyback in March.

In response to the move, Chelsey Tam, senior equity analyst at Morningstar, said the decision to announce the share buyback “is not surprising.” She explained: “It’s a common theme in China when stock prices and growth are low.”

Tam also showed Vipshopanother Chinese e-commerce player that ramped up its own share buyback program last week.

China’s e-commerce sector has been hurt by a sluggish domestic economy.

Earlier this month, Alibaba’s second-quarter results missed expectations on both the top and bottom lines. Temu owner Pinduoduo had its worst session ever on Monday after second-quarter results missed expectations on revenue and earnings per share.

In February, Alibaba announced a $25 billion share buyback after missing revenue targets for the fourth quarter of 2023.