A new wave of stock fund issues and fund splits could inject 80 billion yuan ($11.2 billion) into the stock market, according to Wednesday's China Securities Journal.

 

Approvals for new funds reflected the government's apparent efforts to boost the falling domestic equity market, the newspaper reported.

 

The China Securities Regulatory Commission (CSRC) on February 1 gave the nod to two new closed-end stock funds issued by CCB Principal Asset Management Co and China Southern Fund Management Co.

 

The two funds made a stronger-than-expected debut on Monday, raising 2.8 billion yuan in total. The two funds were forecast to raise about 14 billion yuan in total.

 

Bank of China Investment Management Co Ltd and AXA SPDB Investment Managers Co have also got the green light to launch new funds soon.

 

The newspaper cited Bank of China chairman Xiao Gang, who said that the division's new fund would possibly raise 10 billion yuan. The ceiling of the AXA SPDB Investment Managers fund was likely to reach 9 billion yuan.

 

Analysts told the newspaper that there would also be at least five fund splits soon, each possibly bringing 8 billion to 10 billion yuan into the stock market.

 

The CSRC suspended the launch of new funds late last year in reaction to the surging domestic stock market. The Shanghai Composite Index nearly doubled last year. But the benchmark index had fallen nearly 30 percent from its record high in mid-October by early February, as investors sold holdings due to concern over a possible US recession.

 

Chinese shares lost 2.09 percent on Wednesday, with the Shanghai index losing 97.27 points to 4,567.03.

 

(Xinhua News Agency February 21, 2008)