Key facts
- China's securities regulator held a symposium over the weekend to discuss capital markets and stabilize sentiment.
- State-backed investors, insurers, and asset managers are involved in efforts to steady the A-share market.
- The ChinaAMC STAR 50 ETF, tracking a chip-heavy index, saw record inflows of 13.8 billion yuan on July 20.
- The STAR 50 index surged 11% on July 21, its largest one-day gain in nearly two years.
- Major insurers like China Life Insurance and Ping An Insurance Group have pledged increased investments.
- Authorities are deploying a broad arsenal to stabilize tech shares amid concerns over US sanctions and high valuations.
Beijing is mounting a broad effort to stabilize its stock market, particularly in artificial intelligence and semiconductor shares, following a sharp sell-off driven by concerns over US sanctions and high valuations. The China Securities Regulatory Commission (CSRC) convened a symposium over the weekend with executives from listed companies, experts from securities firms, and fund managers to discuss capital markets and shore up sentiment.
This coordinated push involves regulators, state-backed investors, insurers, and asset managers. The latest sign of support came on July 20, when the ChinaAMC STAR 50 ETF, a major fund tracking the chip-heavy index, attracted a record 13.8 billion yuan (S$2.6 billion) in inflows. While the source of the buying was not immediately clear, traders suggest state-backed capital was directed toward technology shares.
The STAR 50 index surged 11% on July 21, its biggest one-day gain in nearly two years, after tumbling around 17% the previous week. Zhuang Jiapeng, fund manager at Shenzhen JM Capital, noted that the national team's buying of the STAR 50 ETF provided a signal of official confidence.
Support is also coming from China's largest insurers, with at least five pledging to boost investments. China Life Insurance stated its unit bought more than 10 billion yuan worth of stocks and funds, and vowed to increase holdings in new growth sectors. The People's Insurance Company (Group) of China and Ping An Insurance Group made similar commitments.
State-backed asset managers have also signaled support, with Bosera Fund Management saying it would invest 50 million yuan of proprietary funds into its managed equity products. In a notable move, brokerage GF Securities is raising its margin financing quota by 90 billion yuan, offering investors greater access to liquidity as leverage is being unwound.