(Bloomberg) — China’s largest mutual fund companies have promised to buy their stock-focused products, heeding calls from authorities to boost the market as the sell-off continues.
Most Read from Bloomberg
At least 14 companies had pledged to invest their money as of midday Monday, bringing the total to 870 million yuan ($119 million). E-Fund Management and China Asset Management were among the companies promising 50 million yuan ($6.8 million) each, a sign of their longstanding confidence in the market. The asset management unit of Guotai Junan Securities Co. 200 million yuan, citing its principle of taking market risks with investors.
The planned buying follows renewed promises from the securities watchdog on Friday to boost the markets. The rout in Chinese stocks extended despite a series of recent measures, which included asking the authorities for some investment funds to avoid net selling of shares and encouraging high-tech Star Board-listed companies to buy back shares.
Read: China Steps Up Efforts to Stabilize Markets as Confidence Slumps
Such pledges by mutual funds have been a common feature during stock market downturns, which were also seen at the start of 2022 and during the pandemic sell-off in early 2020. But buying may not do much to move the needle this time around as investors say it suffers from a lack of confidence. , with no clear catalyst in sight.
The CSI 300 index of mainland stocks fell as much as 1% on Monday, taking losses for the month to more than 6%. In Hong Kong, a gauge of Chinese stocks fell 1.9%, while the benchmark Hang Seng slipped deeper into bear market territory.
Foreign funds were once again offloading mainland stocks through links with Hong Kong, which lifted their consecutive net sales to a record high in the 11th session.
Brokerages led the decline at home even as the securities regulator announced on Friday that it would cut fees for handling equity transactions and consider extending trading hours. Traders say the announced measures continue to disappoint a market that needs a fundamental boost.
– With assistance from Mengchen Lu.
(updating numbers and adding table)
Most Read from Bloomberg Businessweek
© 2023 Bloomberg LP