CHINA’S sovereign wealth fund bought exchange-traded funds (ETFs) Monday, expanding its purchases beyond bank shares as authorities step up attempts to boost the country’s flagging stock market. Central Huijin Investment Ltd., a unit of the US$1.35 trillion wealth fund China Investment Corp., bought an undisclosed amount of ETFs and vowed to keep increasing its holdings, it said in a one-sentence statement on its website late Monday, without giving further details. The announcement came less than two weeks after Huijin started increasing its controlling stakes in major domestic banks and followed a series of measures by regulators to revive confidence in the stock market. Huijin, which makes equity investments on behalf of the government, also bought ETFs during China’s market slump in 2015. Several ETFs, including Huatai-PB CSI 300 ETF and E Fund CSI300 Index ETF, saw a jump in volume during the final hour of trading Monday. Citing brokerage estimates, the China Fund newspaper said yesterday that Huijin may have purchased 10 billion yuan (US$1.4 billion) in ETFs. The purchases may be focused on ETFs tracking technology-stock indices, which came in line with regulators’ support of innovation, the newspaper said, citing Huachuang Securities Co. analysis. Li Zhan, chief economist at China Merchants Fund Management Co.’s research department, said Huijin’s move can have “more direct, more obvious” effects on the market than buying bank shares, especially as the economy is stabilizing. 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 2015. China’s blue-chip CSI300 Index, which has fallen 10% this year, dropped 1% Monday to its lowest closing level since February 2019. Foreign selling has been a major driver of the tumult on Chinese stocks. Global fund managers have sold about 37 billion yuan in Chinese stocks via the stock connect mechanism used by offshore investors in October, bringing the total to 164 billion yuan in almost three months, Bloomberg data show. “There’s no need to be pessimistic about the market, given the positive signal from Central Huijin again,” said China International Capital Corp. yesterday. “The fourth quarter is an important window for the ramp-up of policies. While there are headwinds that may weigh on sentiment in the short term, the market has already shown some characteristics of bottoming out.” (SD-Agencies) | 