SHANGHAI (Reuters) - People’s Insurance Co (Group) of China (PICC) and three China-listed tech companies said their major state shareholders plan to reduce holdings - a move that comes amid 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.
PICC’s second-biggest shareholder, China’s National Council for Social Security Fund, plans to sell up to 884.48 million China-listed A-shares or up to 2% of the company over the next six months due to “the need for asset allocation and investment,” the insurer said in an exchange filing on Friday.
The planned stake reduction is worth as much as $1 billion based on PICC’s mainland market price at the end of Thursday. PICC’s Shanghai-listed shares fell 6% on the news in early trade on Friday, but have still logged a gain of 20% this month, making its A-shares three times as expensive as its Hong Kong-listed shares.
Shenzhen Goodix Technology Co, Wuxi Taiji Industry Co and Beijing BDStar Navigation Co also said on Friday that state-owned China Integrated Circuit Industry Investment Fund, known as “the Big Fund”, plans to reduce its stakes in the companies.
Chinese tech shares in particular have surged over the past year on the back of state support and patriotism amid tensions between Washington and Beijing.
An index tracking technology stocks has jumped roughly 37% so far this year, compared with a 17% gain in the bluechip index CSI300.
($1 = 6.9923 Chinese yuan)
Reporting by Samuel Shen and Emily Chow; Editing by Edwina Gibbs
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