China steps up defence of stock market in bid to revive AI boom

{"text":[[{"start":9.64,"text":"China has stepped up its defence of its stock market as Beijing tries to bolster flagging investor sentiment towards the tech sector, with funds associated with its so-called “national team” of state-backed banks seeing large inflows."}],[{"start":23.92,"text":"Net inflows into nine exchange traded funds commonly used by Beijing to support the market hit $11.5bn on Tuesday, the second highest daily amount on record, according to data compiled by Bloomberg."}],[{"start":37.16,"text":"An unusually large proportion of this latest round of state-backed buying was of ETFs tracking China’s two main technology indices, Shanghai’s Star 50 index and Shenzhen’s ChiNext. The two tech indices jumped 9.9 per cent and 6.4 per cent respectively on Wednesday, while the broad benchmark CSI 300 gained 2.3 per cent."}],[{"start":59.36,"text":"On Tuesday, inflows into ChinaAMC’s Star 50 ETF hit $1.7bn, the second highest amount on record after July’s support measures. Those for EFund’s ChiNext ETF hit $1.4bn, its third largest on record."}],[{"start":null,"text":"

"}],[{"start":75.04,"text":"“Clearly there is a regime shift from the previous state-backed ETF buying,” said Song Zhe, a senior investment specialist at BNP Paribas Asset Management. “In the past the majority of the inflow would be in the CSI 300.”"}],[{"start":89.4,"text":"China’s stock market, and in particular its tech-related sub-indices, has suffered heavy selling pressure since July. The CSI 300 is down more than 11 per cent this year and the Star 50 — which at its peak was up more than 60 per cent for the year — is also in the red. Wall Street’s S&P 500 and Nasdaq 100 are both up double digits."}],[{"start":111.44,"text":"Heavy selling by China’s national team at the start of the year weighed on the index and mystified investors convinced that Beijing was keen to promote a steadily rising stock market."}],[{"start":121.6,"text":"However, the national team pumped money into the Star 50 index in July, buying close to $9bn of equities, in an attempt to boost market sentiment ahead of CXMT’s blockbuster Shanghai IPO, after a global rout in memory stocks had spread to China."}],[{"start":122.1,"text":"“The national team thinks ChiNext and Star Board are crucial and represent the future of China,” Song said."}],[{"start":null,"text":""}],[{"start":144.04,"text":"The price action on Wednesday spilled over into some of the Chinese AI labs listed in Hong Kong, with Z.AI and MiniMax jumping 9.6 per cent and 7.5 per cent respectively."}],[{"start":157.32,"text":"The FT reported on Tuesday that new listings and share offerings had been suspended in mainland markets as part of the government’s efforts to support market valuations."}],[{"start":167.36,"text":"Earlier this week Chinese financial authorities announced measures to stabilise markets that included cutting the rate on its relending facility for share buybacks, boosting swap operations and encouraging share buybacks."}],[{"start":null,"text":""}],[{"start":180.76,"text":"Not all investors have been reassured by the government’s steps to support the stock market."}],[{"start":185.86,"text":"“This news over the last couple of days is almost proof that the equity market is too reliant on the government for our liking,” said Sam Konrad, investment manager in the Asian equity income team at Jupiter Asset Management."}],[{"start":198.4,"text":"“It might help support the market in the short term but we are long-term investors and we don’t think it changes the outlook for the Chinese equity market,” he added."}],[{"start":208.32,"text":"China’s army of retail investors, influential in driving the country’s capricious stock markets, appears to be staying on the sidelines despite renewed government support."}],[{"start":218.48,"text":"China’s outstanding margin financing loans — often used as a proxy for retail investor sentiment — have fallen to Rmb2.3tn ($344bn), down from a peak of more than Rmb3tn reached at the end of June."}],[{"start":234.2,"text":"The market was further boosted by share buyback plans announced by a number of companies including CXMT, one of China’s largest listed companies, which announced it would buy back shares worth between Rmb2.5bn and Rmb5bn on Wednesday."}],[{"start":254.16,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793840808_8830.mp3"}