Bangkok: A Chinese state investment fund has promised to expand its purchases of stock index funds to help markets that have been sagging under heavy selling pressure from a property crisis and slowing economy.
Shares logged moderate gains on Tuesday after the announcement by Central Huijin Investment, a Chinese sovereign fund that owns China's state-run banks and other big government-controlled enterprises.
The fund has stepped up buying of shares in big state-owned banks and other companies to counter heavy selling pressure in the Chinese markets. On Monday, benchmarks in Shanghai and the smaller market in Shenzhen bounced between small gains and big losses, while share prices of state-run banks and other big companies rose. The move followed warnings by the market regulator of a crackdown on market manipulation, insider trading and other abuses and promises to protect smaller investors who usually account for the majority of trading in Chinese markets.
The market watchdog, the China Securities Regulatory Commission, welcomed the announcement, saying that share prices at a "historically low level" highlight their medium and long-term investment value. "We firmly support Central Huijin to continue to increase the scale and intensity of its holdings, and will create more convenient conditions and smoother channels for its market entry operations," it said at a statement. It promised to "make every effort to maintain the stable operation of the market."
