The securities regulator has approved four new mutual
funds, seen by analysts as an effort to stabilize the volatile
stock markets.
The benchmark Shanghai Composite Index plunged 8.26 percent
on Monday, falling for the third time in four trading sessions
after the country tripled tax on stock transactions to cool the
market last Wednesday.
The index recorded the largest drop since February 27 when it
slumped 8.84 percent and triggered global stock sell-offs.
Four mutual funds from the fund management firms of INVESCO
Great Wall, Guangfa, Fortune SGAM, and Yimin have been approved by
the China Securities Regulatory Commission (CSRC). The funds will
mainly invest in the stock markets.
The move ended the CSRC's suspension of new fund approvals in
late May amid concerns the huge inflow of investors cash would
cause a bubble.
Five mutual funds were launched in May, raising 35.5 billion
yuan (US$4.6 billion), half of the 71.7 billion yuan raised by nine
funds in April, according to the Shanghai-based financial data
provider Wind Info.
Analysts said the move would help to restore investor confidence
after the sharp plunge over the past few days.
The Shanghai Composite Index ended 2.63 percent higher at
3,767.10 points on Tuesday after it plunged 5.66 percent in morning
trade.
Wang Xinyan, deputy investment executive at INVESCO Great Wall,
said that blue chips would lead in the next market rally after the
correction when small-capital speculative stocks recorded huge
losses.
The new fund of INVESCO Great Wall Fund Management Firm will
raise 10 billion yuan and mainly invest in the blue chips.
(Xinhua News Agency June 6, 2007)