China moves to boost languishing markets by ordering funds to invest more in shares
The Chinese government is trying to encourage people to spend more by ensuring that share prices will rise, ordering pensions and mutual funds to invest more in domestic stock markets
BANGKOK — The Chinese government is trying to encourage people to spend more by ensuring that share prices will rise, ordering pensions and mutual funds to invest more in domestic stocks to help jolt its languid markets out of the doldrums.
Officials told reporters in Beijing on Thursday that beginning this year mutual funds should increase holdings of onshore stocks, called A-shares, by at least 10% a year over the next three years.
Commercial insurance funds will have to put 30% of their annual new premium revenue into share markets beginning this year, they said.
“This means that at least several hundred billion yuan of long-term funds will be added to A-shares every year,” said Wu Qing, chairman of the China Securities Regulatory Commission.
The announcement followed a meeting of top financial officials including ministries in charge of pensions and the central bank.
“Implementing the plan's various measures will further enhance the equity allocation capacity of medium- and long-term funds, steadily expand the scale of investment, improve the supply and structure of funds in the capital market, and consolidate good conditions for the capital market’s recovery,” Wu said.
The ruling Communist Party announced this move just ahead of China’s biggest holiday of the year, the Lunar New Year, which begins on Wednesday, Jan. 29. It’s a time when families tend to splash out on food and travel and little red packets of money for children and young adults, a time of wishes for good fortune.
Markets in Hong Kong and Shanghai rose early
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