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China buys bank shares to bolster confidence

  • Published 10 Oct 2011

Central Huijin Investment, an arm of China's $400bn sovereign wealth fund, said on Monday that it had bought shares in the "big four" state banks. We think the move was aimed at bolstering confidence both in the banks, which suffered an Rmb 420bn outflow of deposits in the first half of September, and in the wider domestic stock market.

Huijin said in a statement that it bought shares in Industrial & Commercial Bank of China (1398:HKG), Agricultural Bank of China (1288:HKG), Bank of China (3988:HKG) and China Construction Bank (0939:HKG) and that it would continue to do so. The benchmark Shanghai Composite Index ended down 0.6% at 2,344.79 Monday, its lowest close since April 2009. Shares in the big four rose slightly, with ICBC ending up 0.3% at Rmb 3.99, Bank of China up 0.7% at Rmb 2.87, China Construction Bank up 0.2% to Rmb 4.41 and AgBank gained 0.4% to Rmb 2.47.

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