July 14, 2020 / 2:52 AM / a month ago

China's state chip fund to cut stakes in two more tech companies

SHANGHAI (Reuters) - China’s largest state-backed semiconductor fund plans to reduce its holdings in two listed technology companies, a decision that comes following a torrid bull run in China’s stock market.

The bull run, encouraged by state media, has been fuelled by signs of an early economic recovery for China from the coronavirus, capital market reforms and accelerating inflows of foreign funds.

Sanan Optoelectronics Co Ltd said in a filing on Tuesday that China Integrated Circuit Industry Investment Fund, also known as the ‘Big Fund’, reduced its ownership in the company by one percentage point to 9.29%, selling 44.793 million shares between July 8 and July 10.

The stake reduction is part of a previously announced plan to cut holdings by 2% by Jan. 4, 2021, according to the statement.

NAURA Technology Group Co Ltd also said in a filing that the ‘Big Fund’ will reduce 2% in the company over the next six months. The fund currently holds 49,31,000 million shares in the company and is its third-largest shareholder.

The share sales follow similar ones on Friday, when Shenzhen Goodix Technology Co, Wuxi Taiji Industry Co and Beijing BDStar Navigation Co said the ‘Big Fund’ would reduce its stake in the companies.

Tech stocks have been surging in China for the past year on the back of state support, driven by tensions between Washington and Beijing over Shenzhen-based Huawei Technologies Co. Ltd.

Reporting by Samuel Shen and Josh Horwitz, Editing by Sherry Jacob-Phillips

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