China’s state buyers have emerged as one of the biggest groups of investors in the nation’s $12 trillion stock market, underscoring how government support underpins the market’s bull run, reports the South China Morning Post. Dubbed the national team and led by Central Huijin Investment, state buyers held a combined RMB 3.94 trillion ($553.1 billion) of yuan-denominated stocks as of the end of June, surpassing the RMB 3.07 trillion held by foreign investors, according to data compiled by Huaxi Securities. State buyers’ holdings accounted for 4.8% of the market capitalisation of shares that were available for public trading and were second only to mutual-fund firms, which held a total position valued at RMB 6.04 trillion, according to the brokerage.
A key benchmark of China’s onshore stocks hit a decade high last month, indicating that state buying had borne fruit, as top leaders repeatedly emphasised financial stability and are keen to promote the stock market as a place to preserve household wealth amid a downturn in the property market.
China’s stock market is the world’s second-largest behind that of the US, but has suffered repeated boom-to-bust cycles amplified by swings in retail sentiment, detached from shareholder returns by listed companies.