Chinese authorities encouraged companies listed on its Shanghai science and technology board to buy back their shares this week, people familiar with the matter said, another sign that China is taking steps to shore up market confidence.

The Shanghai Stock Exchange communicated with the Star-board listed firms after receiving guidance from China Securities Regulatory Commission, according to the people, who asked not to be identified discussing private information. Companies that have applied for equity refinancing are also encouraged to do buybacks, the people added. 

Companies answered the call. Major shareholders at around 30 firms on the tech-heavy Star Board in Shanghai proposed buybacks late Thursday. That compares with with a total of around 230 that have executed share purchases this year, according to data compiled by Bloomberg. 

“While the amounts are not huge and mostly symbolic in nature, the fact that they are willing to do buybacks under these hard times shows their strong intention to boost confidence,” said You Lanqiang, fund manager at Pingtan Strategic Asset Management.

It wasn’t immediately clear why the Star board would be a particular focus, though it’s down 5.1 per cent year-to-date compared with a drop of 1.8 per cent for the CSI 300.

The Shanghai Stock Exchange and China Securities Regulatory Commission didn’t immediately respond to requests for comment.

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An initial boost to sentiment didn’t last, with the Star 50 Index flipping to a loss of 0.3 per cent. Other gauges in China also weakened in afternoon trading, with the CSI 300 Index 1 per cent lower.

The raft of buyback plans comes amid concern among investors about a slew of weak economic data and an escalating property crisis. Overseas investors are on their longest selling streak ever of mainland stocks, the tech-heavy Star 50 Index hit its lowest level in 10 months on Thursday, and the Shanghai Composite Index is headed for its worst month since October.

Some firms that disclosed buyback plans soared, though many pared their advances. Hefei Jingsong Intelligent Technology jumped as much as the 20 per cent limit, while Ningbo PIA Automation Holding rose 12 per cent. Suzhou Novosense Microelectronics and Xinjiang Daqo New Energy gained 6.6 per cent and 2.9 per cent, respectively.

“It is truly rare to see such a multitude of firms disclose buybacks in one evening,” Lanqiang said. “The last time there was such a wave of buybacks was probably around a decade ago, in the ChiNext board rout.” BLOOMBERG