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Chinese money managers pump US$351 million into own products in show of confidence as they navigate fragile market
- Some 60 Chinese mutual fund operators have spent more than US$351 million buying their own funds so far this year
- Bank of Communications Schroder, which oversees 500 billion yuan (US$70 billion) of assets, said it would buy 50 million yuan worth of units of its newly launched fund
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Zhang Shidongin Shanghai
Chinese mutual fund firms have ratcheted up investments in their own products on bets the dip-buying strategy will help them ride out the uncertainty prevailing on the stock markets.
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Some 60 firms have spent more than 2.5 billion yuan (US$350.9 million) buying their own funds so far this year, according to data compiled by the China Securities Journal.
Bank of Communications Schroder Fund Management, which oversees 500 billion yuan of assets, is the latest to join the bandwagon, announcing this week that it would buy 50 million yuan of a newly launched fund and hold the investment for at least a year. Other top-ranked industry players like China Asset Management and Southern Asset Management unveiled similar moves earlier.
The moves add to a slew of stock buy-backs by Chinese companies this year, which indicate corporate insiders see the intrinsic values of their stocks higher than the prevailing share prices.
Liquor behemoth Kweichow Moutai and others have spent at least 60 billion yuan on stock repurchases this year. China’s CSI 300 Index has dropped 7.2 per cent from a January high, erasing the gains from the reopening of the economy and making it a laggard among key Asian markets this year.
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With the earnings season under way and expectations about more coming stimulus measures, “the market is now reassessing the fundamentals against the valuations”, said Shen Chao, a strategist at HSBC Jintrust Fund Management in Shanghai.
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