Sinopec falls into line on stock market push Sinopec has become the latest state-backed entity to take steps aimed at boosting China's flagging stock market, ahead of an important Communist party leadership meeting this weekend. The oil producer's parent company said in a statement to the stock exchange on Wednesday that it bought back more than 6m of Sinopec's Shanghai-listed shares on Tuesday and would spend as much as $17bn purchasing stock over the next 12 months. Shares in Sinopec, China's fifth-largest listed company by weighting, accounting for almost 3 per cent of the Shanghai Composite index, were up 3.3 per cent early on Wednesday afternoon, while the broader market was down 0.4 per cent. Analysts said policy makers were keen to improve investor sentiment ahead of the November 9-12 plenary session, the most anticipated event of the year, in order to help make the case for economic and financial reforms. I think there is a government attempt to boost sentiment, particularly ahead of the third plenum meeting. A stable stock market certainly will be seen as a vote of confidence from locals to support the political agenda and reform which will be discussed and voted on," said Heather Hsu, China equity strategist at CLSA Fortune. Chinese market regulators have been encouraging buybacks since mid-2012 as part of a broader attempt to support the country's ailing equity market. Other steps include a freeze on initial public offerings, which has lasted more than a year, and new rules from the stock exchange directing companies to return at least 30 per cent of profits to shareholders via dividends. Authorities have simultaneously tried to drum up more foreign involvement in the stock market by raising the investment quotas available to overseas funds, which need licences to invest onshore. Central Huijin, the government-owned investment fund, has also been deployed to support stocks. It has repeatedly purchased shares in the big four Chinese banks and has more recently bought into exchange traded funds that track the Shanghai market. In the third quarter, both foreign and local funds were net sellers of mainland Chinese shares, according to research from CLSA Fortune. The brokerage said that listed companies themselves had been the biggest buyers of stock during that period. Chinese authorities have been keen to boost the equity market, partly as a way to offer an investment alternative to property as they try to cool a housing market that they fear is overheating. In September, house prices across 70 cities rose by more than 9 per cent year-on-year. But so far those efforts have failed to bear fruit. The Shanghai index has fallen by one-third since the start of 2010, a period during which the S&P 500 has risen by more than 50 per cent. Analysts have cited a host of reasons for the underperformance, including poor corporate governance, a focus on short-term gains, and an index dominated by state-owned energy and banking stocks. China's smaller market, based in the southern city of Shenzhen and largely made up of privately owned enterprises as well as technology and healthcare small caps, has performed far better year to date.