China stock buyback boom?

Share buybacks are emerging as the hottest trend among Chinese tech giants and industry leader Tencent Holdings Ltd. may be the next to jump on the bandwagon.
$Tencent (TCEHY.US)$ $TENCENT (00700.HK)$ The online gaming giant climbed as much as 3.1% in Hong Kong on Wednesday, just before it’s expected to announce its slowest profit growth ever. Investors are betting that the company will follow in the footsteps of $Alibaba (BABA.US)$ and $Xiaomi Corp. Unsponsored ADR Class B (XIACY.US)$ $XIAOMI-W (01810.HK)$ , which both announced massive buybacks after their earnings, with the moves fueling a rally in their shares.
The improving sentiment in tech stocks reflects broader hopes that China’s crackdown on the sector is coming to an end after the government pledged greater support for the economy and capital markets. But, a recovery remains dependent on concrete action from the authorities, and Morgan Stanley’s equity strategists warn that it’s too early to be optimistic.
Tencent certainly has the financial resources for a buyback. The company held about $40 billion in cash and short-term instruments on its balance sheet at the end of September, a figure that may well have increased when it reports the December quarter results.