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China fund association seeks to rally confidence as stocks tumble
[SHANGHAI] China's fund association on Tuesday sought to rally confidence as the country's stock markets tumbled, by saying the falling prices presented valuable buying opportunities if hedge fund managers made rational investment decisions.
"Confidence is more important than gold," Asset Management Association of China (AMAC) said in a statement on its website."As long as we stick to the philosophy of rational investment ... Sunshine will follow rainy days."
Leading asset managers echoed those sentiments, in a bid to convince investors that the bull market was not yet over.
China's stock market has seen wild swings over the past two weeks, with panic selling by investors knocking the Shanghai Composite Index down over one fifth from its June 12 high.
The meltdown, triggered by fears over a crackdown on the use of margin loans to trade stocks, has prompted a series of government support measures, including a rate cut by the central bank over the weekend, and draft rules allowing pension funds to buy stocks.
The main drivers of the recent bull run - stable monetary policy, prospects of economic reforms, and a re-allocation of assets by households - were unchanged, AMAC said.
Thirteen leading hedge fund managers posted comments in support of AMAC's stance on the association's website. "Now is the golden time for value investors," said Wang Yawei, fund manager at Shenzhen Qianhe Capital Management Co Ltd.
"The rational strategy is to buy and hold those value and growth stocks with good quality." His view was echoed by Jiang Jinzhi, head of Greenwoods Asset Management Co.
"Valuation of bluechips are now very reasonable," Mr Jiang said. "We believe those excessively leveraged speculators have already learned a good lesson. At the current level, we're positive and optimistic about the market."