Chinese state fund Central Huijin Investment made a bold move in the first quarter by purchasing blue-chip stocks worth at least $41 billion to stabilize the sliding stock market, according to the funds’ latest quarterly reports.
The sovereign fund invested at least 300 billion yuan ($41.42 billion) in exchanged-traded funds (ETFs) in the first quarter, including popular options like Huatai-PB CSI300 ETF, E Fund CSI300 Index ETF, Harvest CSI 300 ETF, ChinaAMC CSI 300 ETF, and ChinaAMC China 50 ETF.
These purchases helped China’s CSI300 blue-chip index bounce back approximately 14% from five-year lows experienced in February. The rebound was also supported by market-friendly policies and the replacement of China’s top securities regulator.
Central Huijin had announced in early February that it would expand its investment scope in Chinese ETFs and increase such investments to ensure the stable operation of China’s capital markets.
Investors had suspected that state institutions were intervening to support the market, with more than $17 billion flowing into Chinese-domiciled ETFs tracking the CSI 300 in January. Goldman Sachs also observed heavy buying of domestic ETFs by suspected “national team” state-affiliated investors.
Central Huijin’s purchases included 26.3 billion units of Huatai-PB CSI300 ETF, roughly 87 billion yuan ($12.01 billion), as well as significant investments in E Fund CSI300 Index ETF and Harvest CSI 300 ETFs.
Overall, the move by Central Huijin Investment reflects a strategic effort to stabilize the market and restore investor confidence amidst economic challenges and lackluster government stimulus efforts.