Yesterday, Central Huijin Investment timely announced A-share purchases during the market panic, sounding the rally horn. Today, rescue efforts intensified, with more state capital joining to prevent the trade conflict from morphing into a financial one, significantly reducing the risk of a liquidity stampede.
On April 7, Central Huijin, acting as a quasi-stabilization fund, announced ETF purchases, having done so multiple times since October 2023. It said it would increase allocation, and the PBOC pledged ample relending support if needed.
The National Social Security Fund (NSSF) also announced active domestic stock purchases, adhering to long-term, value-oriented investing.
China Chengtong announced CNY 100 billion in ETF and central SOE stock purchases, with more to come.
The PBOC and financial regulators jointly voiced support, with Huijin clearly acting as a quasi-stabilization fund. These moves help ease concerns, boost confidence, and stabilize expectations.
With PBOC relending, optimized insurance fund entry policies, and higher equity allocation caps for insurers, multiple departments are coordinating to inject vitality into capital markets, showing comprehensive government planning.
The "China version of a stabilization fund" also signals ample reserve funds. Huijin's strong balance sheet, PBOC liquidity support, and expanded channels for long-term funds like insurance will bring more incremental capital to A-shares.
Market response was immediate: trading volume surged. CSI 500 and CSI 1000 ETFs saw daily volume jump from CNY 2.5 billion and 4.9 billion yesterday to 16 billion and 27.5 billion today. The national team's shift from large-cap CSI 300 to small- and mid-cap ETFs was key to the rebound.
Many companies, including Wuliangye, Sinopec, China Three Gorges, Everbright Group, CNOOC, and Kweichow Moutai (accelerating its remaining CNY 4 billion buyback), also announced purchases.
Stay ready and hold tight! Huijin's buying plus PBOC funding demonstrates resolve and capacity. But boosting domestic demand and internal circulation is crucial to withstand future tariff shocks.
Tariffs keep global markets on edge. Last night, US stocks surged on a false rumor of a 90-day tariff pause, adding USD 2.5 trillion in minutes.
That V-shaped spike reversed sharply after swift denial.
Hong Kong stocks also saw wild swings, plunging in the afternoon before recovering. Volatility remains extreme; it's advisable to wait for calmer conditions before trading.
Risk disclaimer: This content is for reference only and does not constitute investment advice. Markets are risky; invest cautiously.
