BEIJING, October 23 (TMTPost)— China’s sovereign wealth fund Central Huijin Investment Ltd. (Central Huijin) took further actions to boost Chinese stock market.

Credit：Visual China

Central Huijin had bought exchange-traded funds (ETFs) and will continue to lift its holdings, according to a statement on Monday. The statement was released on Central Huijin’s website after the market close. China's market benchmark, the Shanghai Stock Exchange Composite Index, posted the fourth day of losses and closed1.7% lower to 2939.29, the lowest since October 31, 2022. While Central Huijin didn’t specify which ETFs it recently invested in or how much it spent, several ETFs, including Huatai-Pinebridge CSI 300 ETF, E Fund CSI300 Index ETF and ChinaAMC China 50 ETF, saw surges in their trading volumes in the final half an hour that day, the state-run newspaper Shanghai Securities News reported.

The shares of Huatai-Pinebridge CSI 300 ETF changed hands valued RMB9.592 billion on Monday, about 56% more than the average turnover value over past two sessions, as the ETF traded valued around RMb6.15 billion from October 19 to 20, according to data from Chinese financial service platform Choice under East Money Information Co., Ltd. The turnover value of E Fund CSI300 Index ETF in the final five minutes alone amounted to nearly RMB300 million, accounting for 26% of the daily value on Monday, Choice data showed.

Monday’s announcement suggested Huijin’s further move in less than two weeks. The recent move showcased Central Huijin’s deeper support for the stock market since ETF typical provides a variety of stocks and other assets, unlike the individual stocks Central Huijin increased its stakes in on October 11. Statements from four leading banks in China marked Central Huijin’s first acquisition of shares since August 2015, when the company invested about RMB20 billion to increase holdings of four major state-backed banks during Chinese equity market turmoil.

Central Huijin acquired 27.61 million shares in China’s biggest bank--the Industrial and Commercial Bank of China on October 11, and the same day saw the fund bought 37.27 million shares in the Agricultural Bank of China, around 24.89 million shares in the Bank of China, and about 18.38 million shares in the China Construction Bank, according to separate statements of these four banks late Wednesday. As a shareholder of these state-owned banks, Central Hui spent a total of RMB477 million to increase its holdings based on close of the banks’ shares that day. The four lenders said Central Huijin will continue its purchase of their shares at the secondary market over the next six months.  

Beijing-based Central Huijin was founded in December 2003 and mandated to exercise the rights and the obligations as an investor in major state-owned financial enterprises on behalf of the central government. The investment company makes equity investments in major state-owned financial enterprises, exercises the rights and performs the obligations as an investor on behalf of the central government to achieve the goal of preserving and enhancing the value of state-owned financial assets. The company does not conduct any other business or commercial activity; neither does it intervene in the day-to-day business operations of the firms in which it invests. China Investment Corporation holds the shares of Central Huijin, but the investment business of CIC and the share management function conducted on behalf of the central government by Central Huijin are completely separated.

Besides the “big four” banks, Central Huijin’s portfolio companies also include China Development Bank, China Everbright Group Limited, China Export & Credit Insurance Corporation, China Reinsurance (Group) Corporation, China Jianyin Investment Limited, China Galaxy Financial Holding Company Limited, Shenwan Hongyuan Group Co., Ltd., New China Life Insurance Company Co., Ltd., China International Capital Corporation Limited;, Hengfeng Bank Co., Ltd.; China Securities Co., Ltd., China Galaxy Asset Management Co., Ltd., and Guotai Jun’an Investment Management Co., Ltd.

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