China's national team may need to accelerate stock purchases after the benchmark notched a record losing streak, though state-backed buying alone may not be enough to put the market on a sustained recovery, according to Bloomberg Intelligence.
Central Huijin Investment Co., the state-backed investor that leads China's market stabilization efforts, raised $231 billion through ETF sales in the first half but has redeployed just $43 billion since purchases resumed in July, BI analysts including Rebecca Sin wrote in a note.
That leaves about $188 billion in dry powder, enough for 75 sessions of buying at the recent pace. The analysis suggests that while the scale of available funds is significant, the pace of deployment so far has been measured relative to the resources on hand.
The note frames the challenge as one of sustainability rather than capacity. Support from state investors can steady prices in the short term, but a lasting turnaround generally requires confidence among domestic and foreign investors that extends beyond official buying. Bloomberg Intelligence's view is that stepping up purchases is a necessary step, though not necessarily a sufficient one on its own.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing