若离若离 ・ Feb. 7, 2024
China Shares Soar as Regulator and State Fund Huijin Vow to Further Boost Market
Central Huijin said it will continue to expand holdings of ETF and safeguard the stable operation of the capital market. The China Securities Regulatory Commission (CSRC) said it will continue to guide various institutional investors, such as public funds and private funds, to enter the market more vigorously.

BEIJING, February 6 (TMTPost)-- Shares of Chinese companies at home and abroad soared as the top securities regulator and China’s sovereign wealth fund Central Huijin Investment Ltd. (Central Huijin) vowed to further boost the market.

Credit:Visual China

Credit:Visual China

 At home, the SSE Composite Index, the gauge tracks stocks  traded at the Shanghai Stock Exchange, closed 3.2% higher on Tuesday, ending a six-day losing streak and recording its best daily performance since March 2022. Hong Kong stock market’s benchmark Hang Seng Index, which also includes many major mainland companies, rallied 4%.

The U.S.-listed  shares of Chinese firms  outperformed market the same day. The Nasdaq Golden Dragon China Index, which tracks 65 China-exposed U.S.-listed companies, settled nearly 6% higher, while the U.S. stock benchmark S&P 500 edged up 0.23%. The American depositary receipts (ADRs) of  three prominent Tesla’s Chinese rivals--Li Auto, Nio and Xpeng each surged more than 10%.  Shares of Alibaba Group, the most valuable Chinese firm listed in U.S., gained almost 5%, and its e-commerce peers JD.com and Pinduoduo added 7.7% and 3.8%, respectively. Shares of Chinese video streaming service provider iQIYI and the leading video sharing platform Bilibili,two components of Nasdaq Golden Dragon China Index, each popped 12%, and another component,  Baidu, Chinese search and artificial intelligence (AI) leader, climbed 3.8%.

At the morning trading of Tuesday, Central Huijin announced it has increased its investment scope of exchange-traded fund (ETF) as it fully recognizes the current market allocation value of A-shares. The state -owned investment company said it will continue to intensify its efforts to increase holdings of ETF, expand the holdings scale, and resolutely safeguard the stable operation of the capital market.

The China Securities Regulatory Commission (CSRC) will firmly support Central Huijin intensify its efforts to increase holdings and expand the holdings scale in stock market, a spokesperson of the regulator responded right after Central Huijin’s announcement. "We will create more convenient conditions and more smooth channels for its market operation," a spokesperson said. At present, the valuation of the stock market at mainland China is at a historically low level, and the medium and long-term investment value has been highlighted, which has been fully recognized by investment institutions including the Central Huijin, the spokesperson noted.

The CSRC will continue to coordinate and guide various institutional investors, such as public funds, private funds, securities companies, social security funds, insurance institutions and annuity funds, to enter the market more vigorously, according to the spokesperson, who added the agency will also encourage and support listed companies to increase the intensity of repurchase and holdings, introduce more incremental funds into the A-share market, and spare no effort to safeguard the stable operation of the market.

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.

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