China’s sovereign wealth fund snapped up shares in the nation’s Big Four lenders and said it plans to continue the purchases, a move apparently aimed at boosting the stocks.
State-owned Central Huijin Investment said in filings to the Shanghai stock exchange on Wednesday night that it raised its stakes in Bank of China, Agricultural Bank of China, China Construction Bank Corp and Industrial and Commercial Bank of China. It added that it would continue the purchases over the next six months, without saying to what extent.
The move may boost the lenders’ shares when trading starts on Thursday morning. Shares in Agricultural Bank, ICBC and Bank of China jumped in 2011 after Huijin bought their stock on the open market.
China’s benchmark CSI 300 Index has retreated more than 5% this year even as hopes of fresh economic stimulus bolstered equities Wednesday. The financials subgauge is down 1.5% in 2023, in line for a third year of losses. Previous measures to support growth and the property market failed to lift investor sentiment.
A growing number of Chinese economist and hedge fund including Shanghai Banxia Investment Management Center call on the government to set up a stabilization fund to buy stocks, lobbying for direct intervention the authorities have refrained from since the 2015 market crash.
In 2015, Huijin acquired billions of yuan in the lenders’ shares in transfers from China Securities Finance Corp as the government orchestrated a market bailout.
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Details of Huijin’s purchases on Wednesday:
Purchased 24.9 million Bank of China shares, raising its holding to 64.03% from 64.02%
Bought 37.3 million shares in Agricultural Bank of China, increasing its stake to 40.04% from 40.03%
Purchases 18.4 million China Construction Bank shares to boost its holding to 57.12% from 57.11%
Bought 27.6 million ICBC shares; that took its stake to 34.72% from 34.71%
