Chinese fund houses told to limit equity sales as economic slowdown worsens - reports
The instructions were reported to have been relayed to fund managers through investment executives at those firms, said a person familiar with the matter.
According to Bloomberg, stock exchanges have issued guidance to a number of large mutual fund houses, asking them to refrain from selling more onshore shares than they have purchased.
This was a tactic used to stem a fall in local assets in times of severe economic slowdown — and China's current period of suffering was only heightened last week after it was revealed the country had entered a state of deflation.
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Meanwhile, yesterday's interest rate cut has done little to boost sentiment, though many believe the government is considering more steps to provide support.
The instructions were reported to have been relayed to fund managers through investment executives at those firms, a person familiar with the matter told Bloomberg.
The individual said the authorities had issued a similar request to investment firms several times last year.
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Chinese consumer prices slipped into negative territory last week for the first time since February 2021 and the economy officially entered into deflation.
The country's blue chip CSO 300 index has fallen seven out of the eight previous sessions and a 2.3% drop on Friday (11 August) was the steepest one-day plummet seen since October 2022.
Meanwhile, default fears for a leading property developer have sparked fears of contagion and further chaos to China's economy to come.
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