Central Huijin Investment Ltd. (Central Huijin), a Chinese state-owned investment company, said it had once again increased holdings of exchange-traded funds (ETF) and will continue to expand it in the future to "resolutely safeguard" the stable operation of the capital market.
ETF is a basket of securities that are pooled together into one fund which is traded on a stock exchange. Typically, ETFs track a particular index, sector, commodity, or other assets.
The company said in a statement that it firmly believes in the development prospects of China's capital market and fully recognizes the current investment value of A-shares.
The statement immediately injected dynamics into the market. The CSI 300 ETF finished the trading day with collective surges in the trading volume, narrowing the declines in multiple indicators such as the Shanghai Composite Index and the Shenzhen Component Index.
"In the face of mounting uncertainties in the global economic and trade environment and sharp fluctuations in global financial markets, time actions from state-owned investors have released strong policy signals, which will effectively guide market expectations, prevent market overshooting, and mitigate external shocks," said Wang Qing, chief macro analyst of Golden Credit Rating.
China Chengtong Holdings Group, a state-owned assets management and capital operation company, said on Monday that its two subsidiaries have increased their holdings of ETFs and stocks of central enterprises, in a bid to "resolutely safeguard" the stable operation of the capital market.
The state-owned company also expressed faith in the development prospects of China's capital market and pledged to continue buying stocks of central enterprises and sci-tech innovation companies, so as to support the high-quality development of listed companies.
China's Central Huijin increases holdings of exchange-traded funds
