What’s new: China’s sovereign wealth fund Central Huijin Investment Ltd. has spent nearly 330 billion yuan ($45.5 billion) in the first quarter shoring up the ailing stock market, Caixin’s calculation based on market data showed.
During the first three months, Central Huijin significantly increased its holdings of onshore exchange-traded funds by more than 122 billion shares, according to recent released quarterly ETF filings.
Funds purchased by Central Huijin include Huatai-Pinebridge CSI 300 ETF, E Fund CSI300 Index ETF, Harvest CSI 300 ETF and ChinaAMC CSI 300 ETF.
According to central bank data, non-banking financial institutions saw an increase in loans of 404.5 billion yuan in February, marking the highest surge since the July 2015 stock market crash. Analysts suggest that this rise in loans is linked to market stabilization measures undertaken by state investors such as Central Huijin and China Securities Finance Corporation.
The context: Although ETFs’ quarterly filings do not stipulate their largest shareholders, they are required to publish changes in positions of investors who own more than 20% of the fund, shedding light on Central Huijin’s investment.
State funds have played a key role in stabilizing China’s latest stock rout. Central Huijin in February said that it would continue to increase its ETF holdings to safeguard the stable operation of China’s capital markets, at a time when the stock benchmark CSI 300 tumbled to five-year lows.
The measures have lifted the A-share market from its bottom in February, but the CSI 300 Index is still 40% down from its peak in February 2021.
Central Huijin invested at least 51.1 billion yuan in ETFs during the last quarter 2023.
Contact reporter Han Wei (weihan@caixin.com)
