1970-01-01 08:33:27
China's securities regulator has resumed approving sales of mutual funds after a two-month suspension as part of its efforts to cushion the stock market from declining further after recent corrections.
ICBC Credit Suisse Asset Management Co Ltd said yesterday that its Core Value Funds has gained regulatory permission to reopen for subscriptions on Friday, the first mutual-fund sales since September 21.
Golden Eagle Asset Management Co Ltd also said it will resume the sales of its Component Stocks Preferred Funds in late November.
The China Securities Regulatory Commission has virtually suspended screening the issue of new mutual funds since September as it wanted to control excess liquidity in the stock market and tighten operations of funds to ensure stability.
Equity-invested mutual funds now account for more than 80 percent of the total fund products. The bold investment strategies of the fund managers in a previous bullish stock market heightened the regulator's worries over a potential crisis if sentiment turned sour, said industry insiders.
By the end of last month, the aggregate equity of China's mutual funds climbed up to 3.312 trillion yuan (US$441.6 billion). The amount almost quadrupled the figure at the beginning of this year.
The combined scale of China's 341 funds run by 59 firms have grown to 2.055 trillion shares by the end of October, nearly 2.8 times as much as that at the beginning of this year.
Earlier this month, the CSRC urged fund companies to avoid expanding blindly and banned them from misleading clients or engaging in speculative investment.
In October, the CSRC ordered that mutual funds must be assessed for their level of risks before they are offered to investors for sale.
"However, the recent tumbles on the stock market have boosted the need to resume the sales of new fund products and give the market a lift," said Dai Ming, an analyst with the Kingsun Investment Management Co.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, closed at 5,158.12 yesterday, versus the record on October 16 of 6,124.04.
Source:Shanghai Daily