China Sovereign Fund Buys ETFs in New Bid to Boost Stocks

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(Bloomberg) -- China’s sovereign wealth fund bought exchange-traded funds on Monday, expanding its purchases beyond bank shares as authorities step up...

-- China’s sovereign wealth fund bought exchange-traded funds on Monday, expanding its purchases beyond bank shares as authorities step up attempts to boost the country’s slumping stock market.Central Huijin Investment Ltd., a unit of the $1.4 trillion wealth fund China Investment Corp. that’s long served as the main vehicle for China’s holdings in state-run banks, bought an undisclosed amount of ETFs and vowed to keep increasing its holdings, it said in a brief statement late Monday.

The benchmark was up 0.4% as of 2:24 p.m. in Hong Kong on Tuesday after a four-session losing streak. There have been growing calls from Chinese economists and hedge funds for the government to directly intervene with a stabilization fund to buy stocks for the first since the market crashed in 2015. The fund could buy different values of stocks when the index is below certain levels and sell when the gauge rises above designated lines, preventing both excessive declines and overheating while making a profit, Li Bei, founder of Shanghai Banxia Investment Management Center, wrote in an Oct.

During the 2015 rout, Beijing tapped China Securities Finance Corp. as its main stabilization vehicle by allowing it to access as much as 3 trillion yuan of borrowed funds from sources including the central bank and commercial lenders. The money was used to buy stocks directly and provide liquidity to brokerages. Even so, the turbulence didn’t end until a year later.

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China Sovereign Wealth Fund Buys Up ETF Shares In Market BoostChina’s sovereign wealth fund Central Huijin Investment Ltd. said it bought exchange-traded funds on Monday, as the state-run fund continues to snap up shares in the market in moves apparently aimed at boosting stocks.
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