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BANGKOK (AP) – China’s state-run investment fund has pledged to increase purchases of stock index funds to support a depressed market under strong selling pressure from the real estate crisis and economic slowdown.
Stocks rose modestly on Tuesday following an announcement by Central Huijin Investment, a Chinese sovereign wealth fund that owns China’s state-run banks and other large government-controlled companies.
The fund has stepped up its purchases of shares in major state-owned banks and other companies to counter intense selling pressure in the Chinese market. On Monday, benchmarks in smaller markets in Shanghai and Shenzhen oscillated between modest gains and deep declines, while stocks in state banks and other large companies rose.
The move comes as market regulators warned of a crackdown on market manipulation, insider trading and other fraudulent activity, vowing to protect small investors who typically account for the bulk of trading in Chinese markets. are doing.
Market watchdog China Securities Regulatory Commission welcomed the announcement, saying stock prices at “historic lows” highlighted the value of medium- to long-term investments.
“We firmly support Central Huizin in continuing to increase its holding size and strength, creating more convenient conditions and smoother channels for market entry activities,” the company said in a statement. “We will do our best to maintain the stable operation of the market,” he promised.
It also said it would encourage stock purchases by institutional investors such as public funds, private equity funds, securities companies, social security funds, insurance institutions and pension funds, and encourage companies to expand stock buybacks.
This move has pushed the market to its lowest level in five years, despite a series of moves to instill confidence in and support real estate developers, whose financial difficulties after the government’s crackdown on excessive borrowing have been a major hindrance. It is unclear whether this will be enough to change the situation. About the economy.
By noon on Tuesday, the Shanghai Composite Index was up 0.8%, and Hong Kong’s Hang Seng Index was up 2.5%. Shenzhen A-share index rose 1.2%.
Technology stocks in Hong Kong rose the most, including e-commerce giant Alibaba, which rose 6.8%, and JD.com, which rose 5.1%.
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