Chinese State Fund Central Huijin Investment Buys Blue-Chips Worth $41 Billion to Support Sliding Stock Market

Chinese State Fund Central Huijin Investment Buys $41 Billion in Blue-Chips to Support Sliding Stock Market

In a bold move to stabilize the sliding stock market, Chinese state fund Central Huijin Investment purchased blue-chips worth at least $41 billion in the first quarter of this year, according to the latest quarterly reports from the funds.

The sovereign fund bought a minimum of 300 billion yuan ($41.42 billion) of exchanged-traded funds (ETFs) in the first quarter, including popular options like Huatai-PB CSI300 ETF, E Fund CSI300 Index ETF, Harvest CSI 300 ETF, ChinaAMC CSI 300 ETF, and ChinaAMC China 50 ETF, as indicated in the ETFs’ reports.

These significant purchases played a crucial role in the rebound of China’s CSI300 blue-chip index, which saw a roughly 14% increase from five-year lows experienced in February. The market-friendly policies and the replacement of China’s top securities regulator also contributed to this positive trend.

Central Huijin had announced in early February that it would expand its investment scope in Chinese ETFs and increase such investments further to ensure the stable operation of China’s capital markets.

The timing of this announcement was crucial as the stock benchmark CSI 300 had hit five-year lows due to China’s weak economic recovery and a lack of robust government stimulus, which had dampened investor confidence.

In the first quarter, Central Huijin purchased 26.3 billion units of Huatai-PB CSI300 ETF, amounting to approximately 87 billion yuan ($12.01 billion) based on Reuters calculations. The fund also added around 73 billion yuan ($10.08 billion) of E Fund CSI300 Index ETF and 53 billion yuan ($7.32 billion) of Harvest CSI 300 ETFs.

Investors had suspected that state institutions were supporting the market, and reports from S&P Global Market Intelligence and Goldman Sachs confirmed heavy buying of domestic ETFs by suspected “national team” state-affiliated investors.

ChinaAMC CSI 300 ETF and ChinaAMC China 50 ETF also saw significant purchases from Central Huijin, with $7.73 billion and $4.97 billion respectively in the first quarter, according to their reports.

This strategic move by Central Huijin Investment underscores the commitment to bolstering the Chinese stock market and restoring investor confidence amidst challenging economic conditions.

(Reporting by Shanghai Newsroom; editing by Miral Fahmy)

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