Investor enthusiasm for funds may wane as a result of
yesterday's stock market plunge, according to analysts.
Thousands of investors snapped up Beijing-based CCB Principal
Asset Management's 10 billion yuan fund issue during its market
debut on Monday in Beijing, Shanghai and other major Chinese
cities.
It was the first fund offered for sale to the public after a
two-month government-imposed freeze was lifted.
"The stock market plunge will trigger selling (of the fund) in
fear of a continuing market slump," said Zhou Liang, China research
manager of Lipper, a Reuters company.
The benchmark Shanghai Composite Index dropped 8.8 percent to
close at 2771.8, its biggest fall, after breaking the 3,000-point
barrier for the first time to close at 3,041 on Monday.
"Fund investors intended to sell the funds when the Shanghai
Stock Exchange soared higher," said Zhou.
Another four approved funds are expected to be issued in March
this year. Huafu Fund Management Co Ltd's new approved fund is
expected to be issued on March 12, according to a company
official.
"Enthusiasm for buying the next round of fund issues is sure to
be weakened because of lower confidence in the stock market," said
Zhou.
The Shanghai Stock Exchange Fund Index fell 8.9 percent to close
at 2,250 yesterday, slightly more than the percentage loss of the
Shanghai Composite Index.
(China Daily February 28, 2007)