stock market Photo:VCG
The Shenzhen Stock Exchange (SSE) announced plans to develop policies aimed at facilitating long-term capital inflows on Friday. The announcement aligns with recent moves by major Chinese wealth management firms to increase their capital market investment and by banks to promote repurchase loan programs, all in an effort to strengthen the stability of the domestic capital market.
At an investment strategy conference for medium- and long-term funds held by the SSE in Beijing Friday, Tang Rui, the SSE's deputy general manager, noted that recent US tariff policies have unsettled global stock markets. This underscores the fact that medium- and long-term funds play a crucial role as the "ballast" and "stabilizer" for ensuring the smooth and healthy functioning of the market.
To facilitate the entry of medium- and long-term funds into the market, the SSE is currently formulating relevant plans that focus on key aspects like product offerings, market environment improvement, and service coordination, with the goal of eliminating the obstacles and bottlenecks that have hindered the inflow of such funds, Tang said.
In parallel, several wealth management companies have announced plans to increase their holdings of Exchange-Traded Funds (ETFs), either through direct investment or indirectly, and intend to further ramp up their investment in the capital market. The total assets under the management of several of these institutions have surpassed 1 trillion yuan ($136.71 billion), the Securities Times reported.
Bank of China Wealth Management expressed its confidence in China's capital markets, and stated that it will actively promote the entry of medium- and long-term funds into the market, increasing exposure to sectors driving new economic growth and domestic consumption amid volatility.
Similarly, the wealth management units of Bank of Communications and Postal Savings Bank of China have been actively accumulating ETFs, leveraging the role of patient capital and medium- and long-term funds, providing strong support for the development of the capital market.
China's six major state-owned commercial banks - the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China - are also leveraging a specialized lending program to support corporate stock buybacks and stake increases, the Xinhua News Agency reported.
Launched in late 2024, the lending program allows banks to access low-cost funds from the central bank, channeling them to listed companies and major shareholders for buyback.
As of Wednesday, the Industrial and Commercial Bank of China has supported nearly 400 stock buyback projects totaling over 100 billion yuan across all market boards.
By the end of March, Agricultural Bank of China had provided over 8.5 billion yuan in stock buyback loans to firms involved in rural development, advanced manufacturing, and green finance.
Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times that this collective effort forms a "unified front" to stabilize the market and attract sustained capital inflows.
While global uncertainties persist, China's focus on opening long-term capital channels and encouraging corporate buybacks is key to building a more resilient market foundation, Yang said.
"This week, a coordinated effort is underway—state-backed funds are actively entering the market, institutional investors are increasing equity exposure, and many companies, especially state-owned enterprises, are announcing buybacks. In addition to repurchasing their own shares, major SOEs are also supporting others through re-lending, all to bolster capital market stability," he added.
The A-share market extended its rebound on Friday, with more than 3,200 stocks posting gains. By the close, the Shanghai Composite Index rose 0.45 percent, the Shenzhen Component Index climbed 0.82 percent, and the ChiNext Index advanced 1.36 percent.
