June 18, 2013
Translated By Zhu Na

Central Huijin Investment Ltd. (Central Huijin), an investment company directly under the control of China's State Council, once again stepped in to prop up China's stock market last week by purchasing stock in 4 of China's "big 5" state-owned commercial banks.

This intervention by Central Huijin, which already owns large stakes in all 4 of the banks, is an indication that the state is once again stepping in to put a floor under the stock market, after steep falls in early June.

According to statements released by the four state-owned banks involved, during trading last Thursday, Central Huijin upped its holdings of The Industrial And Commercial Bank Of China (ICBC), Agriculture Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB). The banks also noted that Central Huijin plans to continue to increase its holdings over the next 6 months.

The state-owned investment company also increased its holdings of China Everbright Bank and New China Life Insurance Co Ltd (NCI) stock.

This is the fifth time that Central Huijin has increased its shareholdings in some of China's key financial institutions on the secondary market since 2008.

In a report in today's Beijing News, it was estimated that Central Huijin spent between 350 and 365 million yuan upping its stake in various companies on Thursday.

According to the announcements, Central Huijin bought more shares in Agriculture Bank of China than the other banks, increasing its holdings of ABC stock by 42.93 million shares, lifting its stake in the company to just over 40 percent. It's estimated that the investment company spent about 115 million yuan on these acquisitions.

Central Huijin spent about 110 million yuan to lift its holdings of CCB stock by 24.49 million shares and acquired an additional 18.46 million of Bank of China shares for less than 100 million yuan.

As of June 2012, Central Huijin held 57.14 percent of CCB shares and 67.63 percent of Bank of China shares.

Central Huijin also acquired an additional 19.32 million shares in ICBC for less than 100 million yuan, lifting its stake in the bank to just over 35 percent.

The price of New China Life Insurance stocks surged by over 5 percent during yesterday's trading after it was revealed that Central Huijin had also upped its holdings of the company's shares last week.

This is the fifth time that Central Huijin has stepped in to stabilize the market following large drops in the key stock indicies.

Central Huijin (中央汇金投资有限公司) is a state-owned investment company that was established in 2003. Although connected to China Investment Corporation (CIC), China's sovereign wealth fund, the company is under the direct control of the State Council and is responsible for "preserving and enhancing the value of state-owned financial assets."

Links and Sources
Beijing News: 汇金“救市” 增持四大行
Economic Observer Online: Huijin\'s Increased Bank Holdings Push up Financial Stocks
Economic Observer Online: Huijin Increases Stake in Banks
Economic Observer Online: Central Huijin Buoys China\'s Banks