China buys shares in bid to boost markets

Central Huijin Investment Co, which holds Beijing’s investments in state-owned financial firms, spent about 363 million yuan ($59.2m) buying bank shares on June 13, 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 $500bn sovereign wealth fund CIC.UL, scooped up shares in Industrial and Commercial Bank of China, Bank of China (BoC), China Construction Bank (CCB) and Agricultural Bank of China.

All four banks said in statements that they expect Huijin to further raise its stakes in them over the next six months.

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.