China’s ‘national team’ owns 6% of stock market

The figures are compiled from quarterly financial statements of listed companies, which are required to disclose their 10 largest shareholders. The actual size of national team holdings is probably larger, given that some likely hold stakes that are too small to rank among the top 10.

The government cash infusion came after the Shanghai Composite index fell more than 40 per cent from its seven-year high on June 12 till late August.

The estimate of the shareholdings of the national team covers positions held by CSF, which is the state-owned margin lender, and by Central Huijin Investment, the holding company for shares in state-owned financial institutions and a subsidiary of China’s sovereign wealth fund.

The market value of CSF’s holdings increased from only Rmb692m ($108m) at the end of June to Rmb616bn three months later. However, the market value of Huijin’s holdings fell by Rmb167bn in the third quarter to Rmb2tn, mostly reflecting mark-to-market losses on shares it previously held. This fall came despite Huijin’s additional share purchases in the period.

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The figures from Wind exclude share purchases by a group of 21 mostly state-owned securities brokerages who in early July pledged to inject at least Rmb120bn of their own funds to support the market. In late August, Bloomberg reported that the securities regulator asked them to add an additional Rmb100bn to their holdings.

Goldman Sachs estimated in September that the government had spent Rmb1.5tn ($234bn) to support the market in July and August, a figure that includes the brokerage purchases.

In late August the securities regulator said that CSF and Huijin would halt large-scale purchases but maintain their existing holdings indefinitely.

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