BEIJING, June 17 China's government has stepped
up efforts to lift confidence in the country's flagging stock
markets by buying more shares in the four biggest commercial
banks, stock exchange statements showed on Monday.
Central Huijin Investment Co, which holds Beijing's
investments in state-owned financial firms, spent about 363
million yuan ($59.2 million) buying bank shares on June 13,
Reuters calculations based on stock exchange filings showed.
This is the third time Huijin has been known to be buying
shares in the secondary market since June 13, when China's stock
market skidded to six-month lows after data showed the
world's second-biggest economy was cooling faster than expected.
Despite China's promise to allow free markets to play a
bigger role in its economy, Beijing regularly intervenes in the
equity market during sell-offs by ordering Huijin or other state
pension funds and insurers to invest millions or billions of
yuan in shares.
In its latest intervention, Huijin, a unit of China's $500
billion sovereign wealth fund, scooped up shares in
Industrial and Commercial Bank of China (ICBC), Bank
of China (BoC), China Construction Bank (CCB)
and Agricultural Bank of China (ABC).
All four banks said in statements that they expect Huijin to
further raise its stakes in them over the next six months.
Just last week, Everbright Bank and New China
Life Insurance said Huijin had raised its
stakes in them with more than 100 million yuan in investments.
Chinese media has also reported that Huijin has bought 5.2
billion yuan worth of shares in three exchange-traded funds that
invest mostly in blue-chip stocks.
Such interventions usually give a fillip to share prices
although the market has in the past surrendered those gains over
For instance, Huijin ploughed $470 million into Chinese bank
stocks in October after investor concerns about rising bad debt
pummeled the shares to their lowest in nearly four years. The
purchase preceded a rally in Chinese bank stocks to their
highest in nearly two years, but prices have since fallen back
by about at least a fifth.
Following Huijin's latest purchases, China has raised its
stake in each of the four banks by 0.01 percent each and now
owns 35.46 percent of ICBC, 67.74 percent of BoC, 57.23 percent
of CCB, and 40.24 percent of ABC, stock exchange filings showed.
($1 = 6.1308 Chinese yuan)
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Jason
Subler and Susan Fenton)