BEIJING (Reuters) – The increase in stakes by Chinese state fund Central Huijin Investment in the country’s four major banks is expected to draw more investors to the market, the official China Securities Journal said in a commentary on Friday.
“Critically-timed ‘actions’ by key shareholders” have given positive signals to stabilise expectations and strengthen confidence in the market, the newspaper said.
China’s “Big Four” state banks said on Wednesday that their controlling state shareholder Central Huijin bought the lenders’ Shanghai-traded shares, and plans to further increase holdings within the next six months.
The move, which lifted Chinese shares, followed a raft of stimulus efforts to revive a flagging stock market which saw the key benchmark fall to 11-month lows earlier this week.
Key shareholders increasing their holdings can “stimulate the ripple effect” of fund inflows into the market, boost investor confidence and foster long-term stability in the market, CSJ said.
Hundreds of listed firms have announced share buybacks and enlarged shareholdings since August, while a growing number of major shareholders have also promised not to cut their stakes or extend the share lock-up period.
(Reporting by Liz Lee and Shanghai newsroom; Editing by Shri Navaratnam)
