Beijing gives Chinese stocks a boost

⬛ China’s “national team” of state-backed financial-services companies has invested Rmb410bn ($57bn) into local exchange-traded funds (ETFs) focused on equities this year, according to UBS. More than 75% of the inflows have gone into ETFs that track the CSI 300 index, says the Financial Times. Central Huijin Investment, which is part of China Investment Corporation, a $1.2trn sovereign wealth fund, has joined state-backed local asset managers and insurers in buying ETFs. The “national team” has played a crucial role in stabilising China’s $9.7trn stockmarket. The CSI 300 index climbed by more than 7% in February, and some observers are pencilling in further gains thanks to low valuations. Money managers have yet to pile in, which also bodes well. China’s regulator has pledged to help long-term capital enter the market, curb short-selling, support state buying, and require listed companies to increase the value of their investments.

⬛ Shares in the £960m BlackRock World Mining trust rose by 3.4% after China revealed plans to accelerate stimulus measures in addition to a 5% GDP growth target for its economy, says Citywire. The dash for growth should lift commodities and mining stocks. China’s ailing economy was blamed for the trust’s poor performance in 2023: underlying returns per share fell by 6.2% in the year to January, including dividends, while shareholders’ returns dropped by 10.4%. The trust’s 17% reduction in its dividend was not as severe as predicted. But revenues declined by 16.6% as commodity prices softened, the US dollar weakened, and costs increased. Still, underlying returns over five years of 78% outperformed the benchmark’s 62%. The dividend yield is around 8%.