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Vocal Chinese hedge fund manager lobbies for stock stabilisation fund in bid to boost confidence and counter foreign selling

  • Li Bei, founder of Shanghai Banxia Investment Management Center, urges authorities to intervene in stock markets to restore investor confidence
  • The creation of a state-backed stabilisation fund can win back investor confidence by absorbing sell-offs that are driven mainly by overseas investors, Li said

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A man walks on the street, in front of the large screen displaying the latest stock exchange data, in Shanghai, China. Photo: EPA-EFE
Zhang Shidongin Shanghai

China’s vocal hedge fund manager has called on Beijing to intervene in its stock markets by setting up a stabilisation fund and restore investor faith, which has been hit by outflows in the past two months after a barrage of weak economic data soured risk appetite.

Global fund managers sold 37.5 billion yuan (US$5.2 billion) of Chinese stocks via the exchange link with Hong Kong last month after a record outflow of 90 billion yuan in August, according to data from the city’s exchange, amid US-China tensions and China’s slowing economy.
The top priority for policymakers is to rebuild confidence among investors and break the vicious cycle of declining asset prices and weak investment sentiment, said Li Bei, founder of Shanghai Banxia Investment Management Center, in an article posted on the company’s official WeChat account on Tuesday night.

“The key is to break the harm declines in asset prices are doing to citizens and their confidence,” Li said. “The vicious cycle has taken hold and policies need to be more forceful now to cut off the circulation quickly.”

Li Bei, founder of Shanghai Banxia Investment Management Center.
Li Bei, founder of Shanghai Banxia Investment Management Center.

The creation of a state-backed stabilisation fund can win back investor confidence by absorbing sell-offs that are driven mainly by overseas investors, and the fund can also make quick profits for the government because of stocks’ depressed valuations, she said.

The article was later deleted.

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