At a time when market sentiment is sluggish, before the market trading from April 7 to 8, many news support for A-shares were released, bringing a real infusion of confidence.

First , Huijin Company issued an announcement during the trading session on April 7, stating that Huijin Company is firmly optimistic about the development prospects of China's capital market, fully recognizes the current A-share allocation value, and has once again increased its holdings in trading open-end index funds (ETFs). It will continue to increase its holdings in the future and resolutely maintain the stable operation of the capital market. Huijin Company said that firmly optimistic about the development prospects of the capital market lies in its optimism about the bright future of China's economy.

Huijin Company has always been an important strategic force in maintaining the stability of the capital market, and is the "national team" in the capital market, playing the role of a "standard fund". The central bank stated in this regard that it will firmly support Central Huijin Company to increase its holdings in the stock market index fund, and provide sufficient re-lending support to Central Huijin Company if necessary, and resolutely maintain the smooth operation of the capital market.

Second, at nearly 22:00 on the evening of the 7th, China Chengtong also issued an announcement stating that its subsidiary Chengtong Financial Holdings and Chengyang Investment increased their holdings of trading open-end index funds (ETFs) and central enterprise stocks to resolutely maintain the smooth operation of the capital market. As the capital operation platform of the State-owned Assets Supervision and Administration Commission of the State Council, it is firmly optimistic about the development prospects of China's capital market. It will further play the role of state-owned capital operation companies in the future, continue to increase its holdings of central state-owned enterprises and technology innovation stocks, be a good long-term investor in listed companies, and strongly support the high-quality development of listed companies.

Third, at 23:00 p.m., China Guoxin issued a document saying that the company is firmly optimistic about the development prospects of China's capital market and is determined to be long-term capital, patient capital and strategic capital. Its subsidiary Guoxin Investment Co., Ltd. increased its holdings of central enterprises, scientific and technological innovation stocks and ETFs, actively supported scientific and technological innovation in key areas, and contributed to maintaining the stable operation of the market.

Fourth, on April 8, the State Administration for Financial Regulation issued the "Notice on Adjusting the Regulation of Equity Assets Supervision of Insurance Funds", raising the upper limit of equity asset allocation ratio, increasing the concentration ratio of investment and venture capital funds, and relaxing the regulatory requirements for tax-delayed pension ratio. The notice increased the proportion of equity assets corresponding to the solvency adequacy ratio of some gears by 5%, further broadening the space for equity investment and providing more equity capital for the real economy.

How to understand the above series of actions to increase holdings? Taking Huijin Company as an example, Gao Ruidong, chief economist of Everbright Securities, believes that in the context of the current market facing external risk factors, Huijin Company's increase in holdings will effectively build market consensus, encourage investors to focus on long-term value from short-term volatility, and inject lasting momentum into the high-quality development of the capital market. As market sentiment rebounds, the A-share market is expected to gradually get rid of short-term disturbances and return to a rational track that reflects the gradual improvement of domestic economic fundamentals.

The reporter noticed that just after Huijin Company issued a document and actually increased its holdings, at the close of the day, the three major A-share indexes showed signs of stabilization, the decline narrowed, funds stabilized, and the number of stocks that fell decreased. Huang Wentao, chief economist of CITIC Securities, said that Huijin Company has begun to provide liquidity to the market, and with the role of a "standard fund", it has played a key role in market stabilization and rebounding at the end of the market.

Zhang Jun, chief economist of China Galaxy Securities, believes that this behavior of increasing holdings and positive policy signals indicate that the A-share market still has strong resilience and high investment value. This measure is a resolute implementation of the decision-making and deployment of "maintaining the smooth operation of the capital market", and is also an active practice of the bottom-line thinking of preventing and resolving systemic financial risks. As a national strategic fund operation platform, Huijin Company uses market-oriented operations to convey the policy level’s clear attitude towards irrational market fluctuations, effectively hedging short-term emotional disturbances through the investment of real money, and creating a stable financial environment for economic transformation and upgrading.

Huijin Company stated that the company fully recognizes the current A-share allocation value. With the deepening of the comprehensive reform of investment and financing in the capital market, the quality of A-share listed companies has steadily improved, the proportion of listed companies representing new quality productivity and technological innovation has continued to increase, the attractiveness of A-share core assets has continued to increase, and the overall valuation is at a relatively historical low. Central Huijin Company will increase its allocation efforts and give full play to the role of patient capital and long-term capital.

Cathay Haitong Securities' latest comments mentioned that after the epic fluctuations, it is believed that the Chinese stock market is entering the batting area and it is recommended to gradually increase the allocation to the Chinese market. After the impact of uncertainty, we must see more certainty in the Chinese market, which forms the basis for the "transformation bull" and reverse investment in China's stock market in 2025.

It is regarded as "Chinese version of the standard fund emerges"

The Central Economic Work Conference in December 2024 emphasized the need to "maintain the stability of the financial market", and the 2025 government work report deployed to "strengthen the reserve of strategic forces and the construction of market stabilization mechanisms" to achieve the goal of "stabilizing the real estate market and stock market". At present, the two companies' increased holdings of ETFs, especially Huijin Company, are understood as "the Chinese version of the standard fund emerged from nowhere."

Since 2008, Central Huijin Company has participated in maintaining the stability of the capital market many times and actively improved the inherent stability of the capital market. From a historical perspective, Huijin Company, as a representative of medium- and long-term funds and the "national team", has all increased holdings and has market vane significance. It issued three announcements in October 2023 and February 2024 to announce that the increase in holdings will be strongly promoted to the Chinese stock market.

Huang Wentao, chief economist of CITIC Construction Investment, believes that from the latest market perspective, Huijin Company has begun to provide liquidity to the market, and the role of a "leveling fund" has played a key role in market stabilization and rebounding in the late trading; in the view of Gao Ruidong, chief economist of Everbright Securities, Huijin Company has effectively stabilized market sentiment through liquidity injection and policy expectations at critical moments, creating favorable conditions for subsequent market stabilization and recovery. From the actual effect, it can be called the "Chinese version of leveling fund."

As an efficient market tool, ETFs can quickly absorb liquidity and stabilize market sentiment when market fluctuates. At present, with the disclosure of the 2024 annual report of public funds, Huijin's ETF investment situation has gradually surfaced. According to the latest disclosed annual fund report data, the scale and share of ETFs held by Huijin Company (including Huijin Investment and Huijin Assets, etc.) have been presented. Huijin Company's allocation scale of ETFs has reached 1.05 trillion yuan, covering 48 ETFs, with a total holding share of up to 371.6 billion shares.

What are the sources of funds for Central Huijin Company to participate in maintaining the stability of the capital market?

First, the assets are strong. As a trusted management institution for state-owned financial capital, Central Huijin Company has a stable operation and a healthy balance sheet.

Second, cash flow is sufficient and stable. Central Huijin Company receives stable cash dividends every year, and the scale of available own funds is relatively large.

Third, financing channels are smooth and efficient. After years of development, Central Huijin Company has established a mature and stable market financing channel covering short, medium and long term, and can also obtain liquidity support from the People's Bank of China.

According to Cailianshe reporters, in the next step, Central Huijin Company will firmly increase its holdings of various market-style ETFs, increase its holdings and balance the holding structure. Central Huijin Company has full confidence and sufficient ability to resolutely maintain the smooth operation of the capital market.

Huang Wentao and his team believe that Huijin Company will continue to increase its holdings and provide liquidity support to the market, which will greatly stabilize the liquidity of A-shares and boost market confidence. From the subsequent derivation logic, liquidity support provided by central banks, quasi-funds, etc. can alleviate the liquidity crisis, interrupt the market's "negative feedback", and promote the rapid recovery of risky assets.

Reserve policies are expected to be introduced in the future

Overall, the most critical reason for the sharp drop in the market is that the United States imposed reciprocal tariffs on economies around the world far exceed market expectations, which triggered severe concerns about the global economic recession. The stock markets of economies around the world fell sharply due to the suppression of risk appetite.

Up to now, the market is paying close attention to the supply situation on the policy side. Gao Ruidong, chief economist of Everbright Securities, said that at the critical moment when the A-share market is facing disturbances in external tariff policies, Huijin Company has increased its holdings in a timely manner, further implementing the instructions of the decision-making level to maintain the stability of the financial market, fully demonstrating the regulatory level's determination to maintain the smooth operation of the capital market and guide medium- and long-term funds to enter the market.

Huang Wentao, chief economist of CITIC Construction Investment, believes that reserve policies are expected to be introduced one after another in the future. He said that the current policy intention of resolutely stabilizing the capital market is very clear, and the quasi-fund and the policies introduced successively will provide support to the market at the two levels of liquidity and risk preference. In its current market position, investors do not need to be overly pessimistic.

Regarding the interpretation of the policy side, Cailianshe reporters also took the "Emergency to stabilize the market during the trading session! "The Central Huijin has increased its holdings in ETFs, and it is not ruled out that it will continue to introduce measures to stabilize the market." There have been reports and tracking. Specifically, recently, the CSRC has intensively released favorable policies, including the new "Nine National Regulations" emphasizing deepening the long-term capital entry mechanism, strictly controlling the "entry gate" for listing, optimizing the dividend system, etc., forming a "policy combination punch" with Huijin's operations. Based on the regulatory action logic in recent years, it is not ruled out that further policy measures to stabilize the market are introduced.

Some views also suggest that in the long run, its policy effect is also closely related to the market environment. If economic fundamentals resonate with policies, market stabilization measures will take effect faster.

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