December 16, 2013 / 11:06 AM / 6 years ago

China sovereign fund Huijin completes purchase of bank shares

SHANGHAI, Dec 16 (Reuters) - China’s government has completed its purchase of shares in the country’s four biggest banks, marking the end of the latest round of interventions aimed to support its chronically weak stock market.

Central Huijin Investment Co, which holds Beijing’s investments in state-owned financial firms, finished buying shares of Industrial and Commercial Bank of China , China Construction Bank , Agricultural Bank of China , and Bank of China , the four banks said in stock exchange filings on Monday.

Huijin bought its stakes through purchases of freely floating common shares on the Shanghai stock exchange, meaning that the banks’ registered capital levels are unaffected.

In June, the four banks announced that Huijin planned to increase its equity stake through purchases on the stock exchange and that the purchases would occur gradually over a period of no more than six months. The latest announcements mark the end of the planned purchases.

Huijin, which is a unit of China Investment Corp, the country’s sovereign wealth fund, has periodically raised its stakes in blue-chip financial firms during periods of stock market weakness, in a bid to boost market confidence.

Last week, Huijin gained approval to enter the interbank bond market, where banks are expected to raise capital by selling billions of yuan in subordinate debt in coming years. The company launched a similar stock purchase plan in October 2012, when the market was weak.

Monday’s announcements were published after the Shanghai and Hong Kong stock markets closed on Monday. An index of Hong Kong-listed shares of mainland financial firms lost 1.0 percent on Friday, in line with a 0.9 percent decline for all mainland shares listed in China.

Hong Kong-listed mainland financial shares are down 0.1 percent for 2013.

Reporting by Gabriel Wildau

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