| China approves 5 new mutual funds after hiatus |
SHANGHAI, Feb. 8 -- China's securities watchdog has given the go-ahead for five new mutual funds after a two-month hiatus in approvals, helping boost share prices as jittery investors return after a week of losses.
News of the decision helped boost the benchmark Shanghai Composite Index by 1.5 percent Wednesday, following a 2.4 percent gain on Tuesday that snapped a five-day decline. The Shenzhen Composite Index rose 1.9 percent to 666.96 on Wednesday.
But Shanghai's key index was up a mere 0.07 percent to 2,718.05 by mid-day Thursday.
The fund approvals are expected to bring another 30 billion yuan (US$3.9 billion;€3 billion) into the markets, the official Xinhua News Agency reported, citing industry insiders.
The China Securities Regulatory Commission suspended approvals for new mutual funds late last year amid worries that prices were rising too fast amid a speculative binge.
The Shanghai Composite Index gained 130 percent last year and had jumped nearly 10 percent in January alone before a recent correction took it back to about where it started the year.
The exact date for launching the new funds was not given, Xinhua said. It said another 20 new funds were awaiting approval from the commission.
The report did not say which funds had been approved. According to the Hong Kong newspaper South China Morning Post, China Construction Bank Principal Asset Management and Zhonghai Fund Management were among the five.
China still limits foreigners' purchases of the yuan-denominated stocks that make up the biggest share of the markets, though that is gradually changing as regulators allow increasing participation by so-called qualified foreign institutional investors.
Foreign institutional investors have been a major source of market activity in recent weeks, but the newfound volatility appears to have worried regulators accustomed to less violent swings in share prices.
Mutual funds raised more than 400 billion yuan (US$51.6 billion; €40 billion) on mainland Chinese bourses last year as retail investors shifted low-interest bank deposits into the market, the Post reported.
China has more than 320 mutual funds, most of them aimed at stock investments, it said.
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