China Petrochemical Group, parent of Shanghai and Hong Kong listed oil giant Sinopec Corp. , plans to spend an estimated maximum $17.7 billion to buy back a 2 percent stake in the Shanghai-listed entity over the next year, in an apparent move to support the mainland's sagging stock market.

The state-owned parent started the purchase on Tuesday, buying 6.06 million shares, or 0.005 percent of the listed arm, Sinopec said in a filing to the Shanghai Stock Exchange dated Nov. 6.

A 2 percent stake amounts to 2.33 billion shares, based on Sinopec's total capital base of 116.6 billion share. Sinopec's Shanghai-listed, yuan-denominated A shares closed at 4.62 yuan per share on Tuesday. Based on these calculations, the parent could spend as much as 107.7 billion yuan ($17.7 billion).

Chinese regulators have publicly urged major shareholders and parent companies of China's major listed firms to buy back shares to support a weak stock market. The Shanghai Composite Index has lost about two thirds of its value since late 2007 when the global financial crisis flared up.

In response to the official appeal, China's Central Huijin Investment Co, the government's main holding firm for state-owned financial companies, has continuously bought A shares in the country's top four state-owned banks over the past year, according to company statements.

The big four are Industrial and Commercial Bank of China (ICBC) , China Construction Bank , Agricultural Bank of China , Bank Of China .

Baosteel Corp, the state-owned parent of China's top steel mill, Baoshan Iron and Steel Co Ltd, spent 1 billion yuan to cumulatively buy 1.2 percent stakes in its listed arm over the course of 12 months ended October 2012, the firm said.

Among other steps to boost stock market sentiment, the China Securities Regulatory Commission suspended stock initial public offerings (IPOs) one year ago. ($1 = 6.1 Yuan)