China’s sovereign wealth fund increased its stake in the country’s biggest banks for the first time since 2015 in a bit to support the capital market and boost investors’ confidence.
Central Huijin Investment Ltd, a unit of China’s sovereign wealth fund China Investment Corporation (CIC), increased shareholdings in China’s four largest state-owned banks and will continue to increase stakes in the banks in the next six months.
Central Huijin on Wednesday increased holdings of Industrial and Commercial Bank of China (ICBC) by 27.61 million shares, Agricultural Bank of China (ABC) by 37.27 million shares, Bank of China (BOC) by 24.89 million shares and China Construction Bank (CCB) by 18.38 million shares, according to the four banks’ separate statements.
Based on the four banks’ closing prices on Wednesday, the value of the increased shareholdings are 130 million yuan, 136 million yuan, 94 million yuan and 117 million yuan, respectively.
Central Huijin will continue to increase shareholdings of the four banks in the secondary market in the next six months, they said.
Central Huijin’s intervention will play a positive role in stabilising market sentiment and restoring investor confidence, state media Securities Times said in a front-page editorial on Thursday.
Huijin’s moveis just the beginning and more medium- and long-term capital is expected to join the market in the future, thus playing a more sustained and powerful role in supporting the market and boost investor confidence, it said.
“Huijin’s increase in the holdings sends a clear positive signal and is an important measure to activate the capital market,” Shanghai Securities News said. “After a long period of correction, the investment value of A-shares is gradually emerging and is expected to gradually bottom out.”