The government has become more active in buying Chinese stocks since August as it attempts to breathe life back into the flagging market, according to Goldman Sachs. The US investment bank predicts this will help engineer a rebound in equities for the rest of the year, reports the South China Morning Post. “The ‘National Team’ buying helps reinforce our view that Chinese equities could stage a recovery rally towards the year-end as growth stabilises and policy easing momentum improves,” Goldman said in a report, using a term used by local investors to refer to state buyers.
It reached its conclusion based on indicators such as the trading patterns of key holdings by state-linked entities, inflows into selected index-based exchange-traded funds (ETFs) and insider buying of shares in state-owned enterprises (SOEs), analysts including Si Fu and Kinger Lau explained in the report.
The top five ETFs favoured by the National Team surged by RMB 90 billion ($12.3 billion) in net subscriptions in August, it said.