China's Fund frenzy continues
Updated: 2007-03-01 16:53

Fund buyers got agitated at the China Construction Bank (CCB) Xisi outlet in downtown Beijing as they were told more than half of the sales quotas were sold out only one hour after the new fund hit the market.

The Jianxin fund raised near 10 billion yuan earlier this week.

Fund frenzy in China had been underscored as authorities resumed the launch of five new funds and wished to pump up investor's confidence amid major stock market corrections.

Staying at the number 1,068 in the waiting list of CCB's Xisi outlet, Mr Sun was not among those in luck to get subscription of the new fund.

Working in a IT company in the high-tech Zhong Guancun, he plunged into fund investment pool as the Spring Festival ended after hearing of his cousin gleaned doubled yields from fund market last year, while his own saving in banks are creeping for the meagre 1.9 percent increase a year.

Sales quotas were set up and the 10 billion yuan cap is seriously enforced to ward off over-subscription, said He Bin, deputy fund manager of the Jianxin fund.

Funds raised more than 400 billion yuan as retail investors shifted low-interest bank deposits into the mainland Chinese bourses, which surged by 130 percent last year after a four-year slump.

Thanks to the booming stock market, equity funds continued to lead the increase with a 15 percent gain in January.

Government has beefed up tightening measures such as ordering bank loans out of the stock investment to cool down the sizzling market whose record high surges was tempered with volatility.

CSRC halted sales of funds in late November to keep the market from overheating after stock values on the Shanghai and Shenzhen exchanges more than doubled since the start of 2006.

Officials and market regulators have been repeatedly reminding investors of the risks the markets bring. CSRC has asked each fund management companies to set up special education fund to make investors aware of the risks.

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