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"National Team" Drive A-share Index Surge

By Xiao Junxiu (肖君秀)
Economic Observer Online
Sep 22, 2011
Translated by Zhu Na
Original Article:

The Shanghai Stock Exchange Composite Index (SHA:000001) surged from a new low for the year of 2426 points on Tuesday to finish trading Wednesday at 2512 points, up 2.66% for the day.

Many market analysts believe that the sudden lift in the index might have been driven by a state-backed institutional investor like the National Social Security Fund (NSSF) deciding to enter the market in making large purchases.

The situation is similar to what took place in early August. When the A-share index dropped to what was then a "new low" of 2437 points on Aug 8, only to shoot up by over 4% the next day. At the time, the Economic Observer quoted an employee of a securities company that manages an account on behalf of the NSSF, saying that the social security fund, which controls over 2 trillion yuan in funds, had started buying stocks after markets opened on Aug 9.

The similarities between what took place on Aug 9 and yesterday's trading have led many market analysts to suggest that a similar intervention by the "national team" may have taken place.

Li Daxiao (李大霄), the director of Yingda Securities Research Institute (英大证券研究所) told the EO that we can't rule out the possibility that the "national team" has once again entered the market.

Links and Sources
Economic Observer Online: Pension Fund’s 10 Billion Yuan Buying Spree Helps Prop Up Chinese Market


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