Monday, August 30, 2010

China funds lost US$65b in 1H due to stocks, say reports

SHANGHAI: China's securities mutual funds made a combined loss of 439.75 billion yuan (US$65 billion, or RM202.46 billion) in the first half of the year, the second biggest loss in history, due mainly to a weak stock market, state media reported on Monday, Aug 30.

Among 661 mutual funds managed by 60 fund management firms, 261 stocks-oriented funds reported the biggest loss, of 296.3 billion yuan, while 155 funds that invested part of their funds in stocks lost 120.5 billion yuan, the official Shanghai Securities News reported.

"Most of the losses were still only book losses," the China Securities Journal said. "Only money market and bond funds performed relatively better in the first half despite a bearish stock market."

China's benchmark Shanghai Composite Index plunged 27% in the first half of this year to become one of the worst performing global stock markets, hit mainly by a government campaign launched in mid-April to ease property price rises.

Property investment typically accounts for about a quarter of China's total investment in the economy, and investors were worried that the campaign could slow China's economic growth and affect other asset prices, such as stocks.

The stock market has staged a technical rebound of 12% since early July. ' Reuters


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