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Five new mutual funds to boost stock market

(Xinhua)
Updated: 2007-02-10 10:17

China's securities watchdog has given the go-ahead for five new mutual funds after a two-month hiatus in approvals, with the aim of boosting the country's stock markets which endured more than a week of losses since the end of January.

The notice, posted onChina Securities Regulatory Commission's website, spurred a new rise on the stock markets over the past days.

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The new equity funds will be offered by CCB Principal Asset Management Co, First State Cinda Fund Management Co, China Universal Asset Management Co, Zhonghai Fund Management Co and Huafu Fund Management Co.

Although the stock markets dropped slightly on Friday, the three-day rise brought Shanghai's key composite index up 21.55 points to 2,737.73 points on Thursday, while the Shenzhen Composite Index rose 149.72 points to 7,691.46.

The move is expected to bring another 30 billion yuan (3.9 billion US dollars) into the markets.

The commission suspended approvals for new mutual funds late last year amid worries that prices were rising too fast amid a speculative binge.

The Shanghai Composite Index gained 130 percent last year and jumped nearly 10 percent in January alone before a recent correction took it back to about where it started the year.

The dates for the launch of the new funds have not been decided, but they are expected to be after the weeklong Spring Festival (Chinese Lunar New Year) holiday from February 18 to 24, according to the commission.

It said some 20 new funds were awaiting approval.

China has more than 320 mutual funds, attracting millions of investors to shift low-interest bank deposits into the stock markets.