China Wants More Equity Funds To Back Stock Market

Beijing has informally asked some money managers in China to prioritize the launch of equity funds over other products like bond funds, according to four sources with direct knowledge of the matter. Xie Yu and Samuel Shen reported for Reuters.

The "window guidance," or unofficial verbal advice from regulators, was given by the China Securities Regulatory Commission (CSRC) to some of the country's biggest mutual fund managers in recent week. I Photo: N509FZ

The "window guidance," or unofficial verbal advice from regulators, was given by the China Securities Regulatory Commission (CSRC) to some of the country's biggest mutual fund managers in recent weeks, the sources said on condition of anonymity because the information was not public.

China's $3.8 trillion mutual fund industry is a key pillar of the country's capital markets, but it has seen sales, especially those of equity funds, tapering off over the past year as stock benchmarks test multi-year lows.

The move to launch new equity funds is part of a campaign by the authorities in the world's second-largest economy over the past year to revive the stock market and boost investor confidence, dented by a destabilizing property sector crisis and sputtering growth.

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