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
that the huge inflow of investors cash would cause a bubble.
Five mutual funds were launched in May, raising 35.5 billion yuan (4.6
billion U.S. dollars), 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.
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.
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