China’s National Team Bought $57 Billion of Shares, UBS Says - Hindustan Times
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China’s National Team Bought $57 Billion of Shares, UBS Says

Bloomberg |
Feb 27, 2024 08:40 AM IST

China’s state-backed funds have poured more than 410 billion yuan ($57 billion) into onshore shares this year in a bid to prop up the market, according to estimates by UBS Group AG, which expects further purchases.

(Bloomberg) -- China’s state-backed funds have poured more than 410 billion yuan ($57 billion) into onshore shares this year in a bid to prop up the market, according to estimates by UBS Group AG, which expects further purchases. 

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The Swiss bank based its calculations on “excess” transactions of 54 Chinese exchange-traded funds. More than 75% of the inflows went into products tracking the benchmark CSI 300 Index while another 13% flowed to those mirroring the CSI 500 Index, according to strategists including Lei Meng.

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State funds have been key to stabilizing the latest stock rout, with Central Huijin Investment Ltd. saying earlier this month that it will continue to increase its ETF holdings. A flurry of trading volume spikes across a number of ETFs suggest authorities have been actively buying both blue-chip and small-cap stocks. 

UBS strategists said the national team held 1.24 trillion yuan of onshore shares in September 2015 — a period that also saw heavy market intervention. The current year-to-date holdings “remain well below the historical level, with the potential to rise further under extreme conditions,” they wrote.  

Read: BofA Says State Funds Drive Biggest-Ever China Stock Inflows

The CSI 300 gauge has risen more than 7% this month while an index of Chinese shares trading in Hong Kong has climbed more than 9%. Some investors see further upside potential thanks to depressed valuations and light positioning among money managers. 

In addition to the national team’s rescue efforts, Beijing has introduced a slew of measures to support the market and the economy, including tighter scrutiny on quant trading and funding support for developers. 

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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