CCTV News: On April 7, during the A-share trading period, Central Huijin Company issued an announcement stating that it has once again increased its holdings in trading open-end index funds (ETFs) and will continue to increase its holdings in the future.

Central Huijin Company announced that it is firmly optimistic about the development prospects of China's capital market, fully recognize the current allocation value of A-shares, and will continue to increase its holdings in the future, and resolutely maintain the stable operation of the capital market. As soon as the news came out, the market immediately responded positively. At the end of the trading session, the Shanghai and Shenzhen 300 ETF collectively increased its volume, and the turnover increased significantly. The declines of multiple indicators such as the Shanghai Composite Index and the Shenzhen Component Index narrowed.

Central Huijin is a wholly state-owned company established by the state and is called the "national team" in the market. As the "stabilizer" of the capital market, Central Huijin plays a key role in market fluctuations. When the stock market is facing downward pressure, Central Huijin often injects liquidity into the market by increasing its holdings of bank stocks or open-end index fund ETFs, providing strong support and stabilizing market confidence. Especially in the past two years, its holdings of ETF funds have significantly increased, and its efforts to support the market have been significantly enhanced.

Why choose to increase holdings of trading open-end index funds

In the announcement released by Central Huijin on the 7th, it was clear that it would increase its holdings of trading open-end index funds, that is, ETFs, and it would increase its holdings again. Experts also interpret this operation.

Experts said that judging from the trading volume before the closing of A-shares on Monday, Central Huijin's main increase in holdings this time is to track trading open-end index funds including the Shanghai and Shenzhen 300, Shanghai Stock Exchange 50, etc. These funds cover a wide range of stock industries and a large market value weight, which has a relatively strong impact on the index.

Liu Bing, member of the China Galaxy Securities Executive Committee, said that the central government’s increased holdings is the core broad-based index of the A-share market, which has strong market representativeness and investment value, and it also accommodates major constituent stocks in Shanghai and Shenzhen and industry leaders. The increase in holdings can play a role in stabilizing the index and stabilizing the market, and at the same time convey a clear signal to the market to resolutely maintain the smooth operation of the capital market.

It is worth noting that this announcement emphasizes "re-increasing holdings". The reporter checked public information and found that in recent years, whenever the A-share market fluctuates violently, Central Huijin has maintained market stability by buying trading open-end index funds. And last year, Central Huijin announced that it would expand the scope of trading open-end index funds to increase their holdings. The latest data shows that by the end of 2024, the allocation scale of Central Huijin's trading-based open-end index funds has reached 1.05 trillion yuan.

Wang Kai, chief strategy analyst at Guosen Securities, said that as the "national team" increased its holdings of trading open-end index funds, Central Huijin not only reduces the risks of a single company by diversifying investment in a basket of stocks, but also uses market-oriented means to convey the country's policy signals to stabilize expectations and protect the market. This demonstrates the macro considerations of guiding long-term funds to enter the market and prevent systemic financial risks, which can maintain the overall stability of the market and avoid excessive intervention in individual stocks.

Experts: China's economic foundation is stable and has strong resilience

Experts said that the increase in central Huijin's holdings will help calm market volatility and boost market confidence in the short term. In the medium and long term, it will be conducive to deepening capital market reform and helping the development of the real economy. In addition to the increase in holdings of Central Huijin, the "national team" has many tools to stabilize the stock market.

Experts believe that the subsequent policy toolbox for stabilizing the stock market, including two special tools to support the capital market, fiscal policies and capital market reform measures, are still sufficient. More importantly, in the face of external shocks, the support conditions and basic trends of my country's stable macroeconomic foundation, strong resilience and great potential have not changed. Data shows that the PMI in March was 50.5%, operating in the expansion range for two consecutive months, and foreign exchange reserves remained stable above US$3.2 trillion for 16 consecutive months.

China Chengtong Increases its Holdings in China's Stocks and Assets

The reporter learned from China Chengtong Group on the 7th that Chengtong Financial Holdings and Chengyang Investment, a subsidiary of China Chengtong, increased its holdings in trading open-end index funds and central enterprise stocks, resolutely maintaining the stable operation of the capital market.

As the capital operation platform of the State-owned Assets Supervision and Administration Commission of the State Council, China Chengtong is firmly optimistic about the development prospects of China's capital market. It will further play the role of state-owned capital operation companies in the future, continue to increase its holdings of central state-owned enterprises and technology innovation stocks, be a long-term investor of listed companies, and strongly support the high-quality development of listed companies.

China Guoxin Increases Chinese Stocks and Assets

The reporter learned from China Guoxin that Guoxin Investment Co., Ltd., a subsidiary of China Guoxin Holdings Co., Ltd., will increase its holdings of central enterprises, technology innovation stocks and ETFs through special re-loans for stock repurchase and increase holdings, with the first batch of amounts of 80 billion yuan.