On October 23, Central Huijin Investment Co., Ltd. announced that Central Huijin bought exchange-traded open-ended index funds (ETFs) today and will continue to increase its holdings in the future.
On the same day, many ETFs such as Huatai Berry CSI 300 ETF, CSI 500 ETF, and Huaxia SSE 50 ETF suddenly increased their trading volume at the end of the day. In the eyes of market participants, Central Huijin's increase in its holdings of large-cap blue-chip ETFs reflects the country's determination to maintain the stability of the capital market, and also highlights the allocation value of the capital market. ETFs track market indices and represent the market as a whole. Overweight holdings of large-cap blue-chip ETFs are more direct in supporting the underlying blue-chip indexes and more directly in boosting overall market sentiment.
After the announcement, FTSE China A50 index futures rose sharply in the short term, and as of press time, FTSE China A50 index futures rose 0.40%.
Image source: Screenshot of wind APP
A number of ETFs traded at the end of the day
At the end of October 23, the trading volume of many ETFs such as Huatai Berry CSI 300 ETF, CSI 500 ETF, and Huaxia SSE 50 ETF suddenly increased.
Image source: Wind APP screenshot
According to Wind information statistics, as of the end of June this year, Central Huijin Company was the largest holder of Huatai Berry CSI 300 ETF, CSI 500 ETF, Huaxia SSE 50 ETF, Huaan SSE 180 ETF, Cathay SSE 180 Financial ETF, etc., with a holding share ratio of 13.09%, 24.91%, 29.73%, 92.74% and 67.20% respectively.
The signal is strong
Industry insiders said that the signal of Central Huijin to buy ETFs is strong. Central Huijin's increased holdings of large-cap blue-chip ETFs reflect the country's determination to maintain the stability of the capital market and highlight the allocation value of the capital market. Secondly, the market has a greater impact. ETFs track market indices and represent the market as a whole. Overweight holdings of large-cap blue-chip ETFs are more direct in supporting the underlying blue-chip indexes and more directly in boosting overall market sentiment.
Li Zhan, chief economist of the research department of China Merchants Fund, told reporters that from the perspective of market entry timing, Central Huijin Company needs "threshold" and "timing" to enter the market, and the large decline in stocks, the vicious circle of irrational capital outflow in the market, the limited effect of other conventional policies and the low trading volume are important conditions for making a move; In addition, during the economic growth bottoming and rebound period and the market bottom, the buying effect of Central Huijin Company tends to be better. The entry of Central Huijin into the market to buy ETFs boosted the confidence of investors in the entire stock market.
Chen Guo, chief strategy officer of CSC Securities, told reporters that the purchase of ETFs by Central Huijin Company sends a positive signal to the market and pays attention to the subsequent increase in holdings of Central Huijin Company.
Play the role of equalization fund
Recently, Central Huijin Company has taken frequent actions. On the evening of October 11, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank respectively issued announcements that they had received a notice from their controlling shareholder, Central Huijin Investment Co., Ltd., that Central Huijin Company increased its holdings of A-shares through the trading system of the Shanghai Stock Exchange on October 11, and Central Huijin Company intends to continue to increase its shares in the secondary market in its own name in the next six months (from the date of this increase).
Chen Yi, chief economist and director of the research institute of Sichuan Finance Securities, said that since 2008, Huijin has increased its holdings of bank stocks many times, achieving the effect of stabilizing the market. This increase in holdings is a direct entry of funds into the market, which has achieved a more significant and direct effect than other policies, and at the same time plays a positive demonstration role in the investment of other large central enterprises and state-owned holding companies in the market, which is conducive to introducing more long-term funds to the market.
From the perspective of market participants, the purchase of ETF funds by Central Huijin Company is equivalent to playing the role of equalization fund. Yang Qinqin, chief analyst of macro strategy at Huaxin Securities, believes that the funding sources of the leveling fund mainly include governments, banks, securities companies, insurance companies, trust companies, listed companies, etc. Assets bought in the market mainly include large-cap blue chips, bonds and ETFs. Generally speaking, the duration of the equalization fund is more than one year, and it is usually delisted when the stock market is rising and the fund has obtained a certain profit, so as to avoid damaging the stability of the stock market.
Source: Securities Daily