Funds News
- Mutual funds raise $3.3b in 1 day
Date: 13-Jun-2007 Sources: (Shenzhen Daily)
TWO Chinese mutual fund companies raised a combined 25 billion yuan (US$3.3 billion) from new fund launches in a single day Monday, as investors shifted to funds following recent sharp falls in the stock market.
GF Fund Management, based in Guangdong, raised 15 billion yuan, while Shanghai-based Fortune SGAM, the local fund arm of French lender Societe Generale, raised 10 billion yuan, the firms said yesterday.
The companies said they had closed the funds ahead of schedule because they had raised the maximum amounts allowed by securities regulators.
Regulators, worried by a massive inflow into the domestic mutual fund industry late last year, had unofficially capped the maximum amount of proceeds allowed to be raised by a new fund at 10 billion yuan.
But the government has eased the grip in a bid to bring in more institutional capital to help stabilize the highly speculative domestic stock market, which had been battered by a stock transaction tax hike late last month, regulatory and fund industry sources said.
Speculation reigns on China's stock markets partly because the mutual fund industry now manages just around 1 trillion yuan, a fraction of the country's total market capitalization of more than 17 trillion yuan. Analysts said some retail investors, who suffered heavy losses from a sharp fall in the domestic stock market after the government tripled the stock stamp duty May 30, had been warming up to funds to diversify risks.
'Quite a lot of retail investors were dealt a heavy blow by the May 30 crash. This prompted some of those investors to dump stocks in favor of funds,'the Shanghai Securities News said yesterday. Domestic funds' returns in May were roughly in line with a slightly more than 10 percent gain in the CSI300 index, which tracks 300 A shares, a research report by Lipper, a global fund intelligence firm owned by Reuters, said Monday.
Two other domestic fund management firms are launching new funds this month. The government's quick approval of the four fund launches was seen by stock market analysts as part of an effort to avoid a hard landing in the high-flying stock market.
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