SHANGHAI, June 21 (Reuters) - Central Huijin Investment Ltd, China’s state-owned investment company, said late on Thursday it recently bought exchange-traded funds and will continue to do so.
China’s stock market hit six-month lows on Thursday amid a worsening cash squeeze, worries over economic growth and prospects of the U.S. Federal Reserve slowing the pace of monetary stimulus.
Huijin, a unit of China’s $500 billion sovereign wealth fund , has already been buying mainland-traded shares in China’s top four banks as well as Everbright Bank and New China Life Insurance.
In addition to buying shares in financial institutions, “we have also recently bought ETFs via the secondary market, and will continue relevant market operations,” Huijin said in a statement on its website.
Beijing has promised to allow free markets to play a larger role in its economy, but Huijin - which holds the government’s investments in state-owned firms - and other state pension funds and insurers, have been regularly stepping into the equity markets amid sell-offs.
Although it is a common practice for Huijin to increase holdings in its subsidiaries, buying ETFs is a rare move and is being seen by market plays as a gesture by the authorities to boost market confidence.
China’s share market has fallen more than 9 percent since the start of the year. (Reporting by Samuel Shen and Kazunori Takada; Editing by Jacqueline Wong)