(Yicai Global) May 25 -- Shares in Lufax Holding jumped as much as 5 percent yesterday after the Chinese financial services firm announced a USD305 million share repurchase plan in a bid to boost the company’s stock price which slid below its issue price last month.

Lufax’s stock price [NYSE:LU] closed up 3.02 percent yesterday at USD12.61. It had earlier reached USD12.88. This is still below the issue price of USD13.50 when the unit of insurance giant Ping An Insurance Group floated in New York last October.

The firm and its executives will buy back as much as USD305 million worth of company shares over the next six months, the Shanghai-based firm said yesterday. Lufax will repurchase up to USD300 million and the rest will be bought by senior management, it added.

Senior executives will use their own personal funds to purchase the stock and have agreed to a lock-up period of at least half a year, it added. Their participation in the share repurchase scheme demonstrates management’s confidence in the future prospects of the company.

Share repurchases usually happen when the company feels that its stock is undervalued. By reducing the number of publicly available shares, it can increase demand for its stock and thus the price.

Lufax began life as a peer-to-peer lending platform in 2011 but as regulations tightened it exited the field in July 2019 and moved into consumer finance. The company raised USD2.4 billion from its initial public offering.

The price of a number overseas-listed Chinese stocks have fluctuated over the past year due to geopolitical uncertainties. Search engine giant Baidu [NASDAQ:BIDU] said last year it will buy back USD4.5 million worth of shares, e-commerce titan Alibaba Group Holding [NYSE:BABA] has committed to repurchase USD10 billion and internet behemoth Tencent Holdings’ music arm [NYSE:TME] announced a USD1 billion share repurchase scheme in March.

Editors: Dou Shicong, Kim Taylor