China’s largest mutual fund houses promised to buy their own equity-focused products, heeding calls from authorities to bolster the market as a selloff continues.
(Bloomberg) — China’s largest mutual fund houses promised to buy their own equity-focused products, heeding calls from authorities to bolster the market as a selloff continues.
At least 14 firms pledged to invest in their funds as of mid-Monday, taking the total tally to 870 million yuan ($119 million). E-Fund Management Co. and China Asset Management Co. were among those promising 50 million yuan ($6.8 million) each, referring to their long-term confidence in the market. The asset management unit of Guotai Junan Securities Co. committed 200 million yuan, citing its principle to bear market risks with investors.
The planned purchases come on the heels of renewed vows from the securities watchdog Friday to boost markets. A rout in Chinese stocks has extended despite a string of recent measures, which included authorities asking some investment funds to avoid net selling equities and encouraging companies listed on the tech-heavy Star Board 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 slumps, also seen at the start of 2022 and during the pandemic selloff in early 2020. But the buying may do little to move the needle this time around as investors say the market suffers from a lack of confidence, with no clear catalyst in sight.
The CSI 300 Index of mainland shares fell as much as 1% on Monday, taking losses for the month to more than 6%. In Hong Kong, a gauge of Chinese shares slid 1.9%, while the benchmark Hang Seng index slid deeper into bear market territory.
Foreign funds were again offloading mainland shares by the links with Hong Kong, taking their net selling streak to a record 11th session.
Brokerages led the decline onshore even as the securities regulator said Friday it will slash handling fees for stock transactions and study extending trading hours. Traders say the announced measures are still a let-down for the market that needs a fundamental boost.
–With assistance from Mengchen Lu.
(Updates figures, adds table)
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