China regulator to meet global investors in bid to halt outflows
CHINA’S securities regulator plans to convene a meeting with some of the world’s biggest asset managers, its latest attempt to shore up confidence after a record stretch of outflows by foreign funds.
Fang Xinghai, a vice-chairman of the China Securities Regulatory Commission (CSRC), will host the meeting scheduled to take place in Hong Kong, people familiar with the matter said, asking not to be identified discussing private information.
Fidelity International and Goldman Sachs Group are among those invited, one of the sources said.
China has long relied on large domestic investors to support markets during volatile times, but is now stepping up efforts to influence some of the biggest global funds. The meeting comes one day after a seminar with some of China’s largest institutional investors, where the regulator urged the state pension fund, large banks and insurers to increase stock investments.
Global funds have been fleeing the mainland market, offloading almost US$11 billion in a 13-day run of withdrawals through Wednesday (Aug 23), the longest since Bloomberg began tracking the data in 2016.
China’s economy is struggling to regain momentum following years of Covid restrictions, a housing slump and a crackdown on the country’s private sector.
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The CSI 300 Index of shares in Shanghai and Shenzhen dropped as much as 0.7 per cent shortly after the opening bell, extending its slump this month to 7.7 per cent and keeping it as one of the world’s worst performers this year.
A top Chinese hedge fund has blamed foreign investors for sinking the stock market. Li Bei, founder of Shanghai Banxia Investment Management Center, said in an article posted on social media platform WeChat that overseas investors have stirred up market volatility and, “taken together, they are a bunch of aimless flies”.
That said, foreign funds have accounted for just around 6 per cent of the total onshore turnover this year. Overall, they own less than 4 per cent of total A-shares outstanding, according to a report this month from China International Capital.
The CSRC did not respond to a fax seeking comment. Fidelity and Goldman declined to comment.
Beijing officials have been on the offensive over the past months in trying to reassure investors of the strength of the economy and their openness to foreign investors. A Politburo statement in July promising more support sparked an initial rally that quickly faded away as economic data continue to disappoint and stimulus fails to impress.
China has taken a series of steps to boost investor confidence recently, including guiding mutual funds to buy their own products, encouraging companies to step up share buybacks, and asking mutual funds to avoid dumping stocks. That has achieved little so far, with the CSI 300 Index now hovering near its lowest since November.
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