China brokerages plan $19b fund to reassure market

Twenty one Chinese brokerages will invest an aggregate $19.3b in an exchange-traded market stabilisation fund amid steep declines on mainland bourses.

Twenty one of China’s biggest securities firms will jointly invest Rmb120 billion $19.3 billion in a fund to “stabilise” the country’s volatile capital markets, which have plunged by nearly 30% in three weeks, according to an official statement.

Led by Citic Securities and Haitong Securities, the brokers will allocate no less than Rmb120 billion, or 15% of their combined net assets as of end-June, to establish a blue chip-based exchange traded fund ETF, according to a joint statement issued by the brokers on Saturday.

The statement, published online by the Securities Association of China, said the brokers also vowed not to sell off their...

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