China fund association calls on managers to back market

The Asset Management Association of China (Amac) has made a rallying call for domestic fund managers to continue to support mainland stocks, despite evidence of a bear market in June.

The association, which represents 95 mainland asset management firms, including all of the big names, calls for fund managers to take advantage of the buying opportunity that the equity market correction is now providing, in an official statement.

Meanwhile the People's Bank of China (PBOC) has intervened to cut interest rates in a bid to bolster investor support. But foreign analysts are suggesting a further stock rally at this point would be unsustainable.

The PBOC announcement coincided with various initiatives from the government to boost the market. Most notably, there has been speculation in Chinese media that Central Huijin, the domestic sovereign investor, pumped Rmb10 billion into the market by buying four ETFs investing in blue-chip stocks on Monday this week.

This speculation was supported by a statement from the Ministry of Finance on its website, that the government is to allow national pension funds to allocate 30% of their assets to stocks, equity funds and mixed asset funds.