By: Sun Zhao Yang
Compiler: http://www.fundcn.org

Awakened the sleeping lion’s — Funds in China (5)

4, steady development stage

By 2001, China’s fund management companies from 14, closed the Securities Investment Fund 34. In September 2001, approved by the management, by Huaan Fund Management Company set up our first open-end securities investment funds — Huaan Innovation, China’s fund industry’s development has entered a new stage. In 2002, an open-end fund in China is seeing an unconventional type of development, rapid expansion of the size, as at the end of 2002, Open Fund has risen to 17. October 28, 2003 by the NPC Standing Committee passed the “Law on Securities Investment Funds” The promulgation and implementation of China’s fund industry and capital market development in the history of an important milestone, China marked the fund industry has entered a new stage of development.

My fund for the development of the historical origins in 1992, standardize the origin of the funds in March 1998. Although our historical norms fund is not long, but in the past nine years, the Fund also has experienced a number of ups and downs. experiencing 1999 5 19 prices, and in June 2001 on the 2245 Stock Index, the highest point also experienced in July 2005 on the 998 Stock Index low, but also experienced equity division reform of joy. Meanwhile, we also see that in June 2001 on the card index at 2,245 points near the stock market investors, With the index fell to January 25, 2002 of 1,451 points, Fund holders of its net asset value has fallen by 19.18%. Consider that the discounted closed-end funds, a considerable number of investors lost more than 40%. January 2002 has been set up to the 33 closed-end funds to early January 2004 to basically restored to the former one by the former The net has experienced during the 24 months of time; These investors to the principal until the second half of 2006 to restore and experienced a period of at least 54 months time. My fund for the development of the history shows the stock investment funds are long-term financial management tool rather than short-term speculation as the money-making tool.

Awakened the sleeping lion’s — Funds in China (6)

Since 2000, China’s macroeconomic long maintained a steady and relatively fast growth, prompted the Securities fund industry has developed rapidly. Only in 2005 as an example, its GDP growth rate reached 9.9%. while the consumer price index rose only 1.8% or so, maintaining a lower level. In 2005 the whole of China macro-financial environment has a wide currency, tight credit situation, a very affluent market funds, causing money market interest rates continued to decline, the bond market anomaly outraged. Equity Division comprehensive reform of the way and the issue of warrants, “Securities Act” and the “Company Law” to the changes, of the Corporation with the help of large-scale renovation. This marks that China’s stock market reform in 2005, made a series of important breakthroughs. And short-term financing, the issuance of certificates, bonds forward the introduction of asset-backed pilot implementation. This marks that China’s bond market in 2005 has made innovation a major step forward. 2005 China continued to maintain a rapid growth momentum of development. end assets amount to 469.116 billion yuan, an increase of 44.5%; Securities investment funds to reach the 218, in 2004 compared with an increase of 57. is the largest ever increase in the number of the year. Calculating the scale expansion of the Fund’s greatest contribution. 2005 fund asset size of the increment of 71% could be attributed to the new fund contribution 27.3% can be attributed to the net inflow of funds and the remaining 2.7% came from the performance of the Fund contribution.

Awakened the sleeping lion’s — Funds in China (7)

In an open-end fund rapid growth in the circumstances, closed-end funds have a market share tends to narrow, its total number of funds as a proportion of total 2004 from the 33.54% drop to 24.77%. Asset size for the fund industry from the 2004 ratio of 24.96% down to 17.52%. In an open-end fund, stock fund companies are still most interested in products, their number from the end of 2004 to 60 by the end of 2005, 95. become the largest increase in the volume of the year. 2005 China Open Fund holders of households reached 4.4194 million. growth than in 2004 10.3%. institutions hold assets ratio at the end of 2004, the 38.81% rise in 2005 to the end of 47.2 2%. 2005 China has also set up eight new fund management companies, fund management companies to reach a 53. Joint-venture fund management companies the total number of fund management companies has risen to 37.7%. 2005, the stock market fell by the impact from the absolute returns, and stock market performance correlation called major types of fund performance is poor, However, the benchmark index comparing it to the stock market as the main battlefield of the overall fund beat the benchmark indices, in the bond market and the main battleground of the Fund could not overcome benchmark, the market once again staged a strong market is not strong, Be not weak scene. Two closed-end funds with the market’s overall performance is unsatisfactory, the third consecutive year that trading volume dropped significantly.

Awakened the sleeping lion’s — Funds in China (8)

2006 China’s stock market is still bullish state, the fund industry to maintain rapid development Fund management companies are increasing the level of maturity. 53 fund companies under the 278 funds in 2006 fourth quarter made an unprecedented bumper crop, the total amount of net income 54.15 billion yuan, an increase of 119.79%, the Central 2.41-fold increase, Fund creators quarter net income on record. It is also the main body of such high yields, making the fourth quarter of the Fund’s shareholdings trend of the market has once again become a concern, In particular fund in the fourth quarter of the 67 new stocks and better reflect the Fund’s new investment values. Since June 2006, a total of 73 IPO listing. The intake of new shares, added to the stock of fresh blood, the bull market investors to provide more choice. In the new fund 67 stocks, in 2006 listing of the new shares have 17, 2007 listed the four, the new fund shares together accounted for meeting new shares of the total 31.34%. Industrial and Commercial Bank of China, the Guangzhou – Shenzhen Railway, China Life, China Merchants Fund vessels have been favored, were 6, 11, three fund positions for new shares, the shares of small and medium plate fund is more focused Jiancang targets A total of 15 small and medium plate by the Fund, the new unit holders.

Four quarters of the fund will Gu Jingwei paying attention to the 2007 performance is expected to continue to go up the units, In particular, a group of 2,006 annual performance growth is expected to determine the relative units. Statistics show that 67 new stocks current average earnings per share of 0.3818 yuan. A far higher than that of all shares of the average level of performance.

Awakened the sleeping lion’s — Funds in China (9)

February 3, 2007. NPC Vice Chairman Cheng Siwei of the Chinese Academy of Social Sciences Professor organized by the enterprise annuity, social security and a harmonious society Forum pointed out that the social security funds should be considered a guarantee of value, value-added, These funds invested on the stock market is feasible, taking into account the risks, however, the social security funds for investment in the stock market. each can be taken a way to have a rational design of the Fund to operate, and the operation of the fund rate of return is not necessarily the pursuit of a high. Social security funds will be to fund the market has undoubtedly in 2007 to fund the development of a needle into the arm.

At present, the investment of funds, investors with great enthusiasm, subscription, purchase, very encouraging. After the Spring Festival, the first approved the issuance of an open-end fund — built letter optimizing the allocation of funds, on the 26th, began publication. Investors have responded enthusiastically to maximize investment protection for the interests of effective control scale, raised by the original deadline of March 23 advanced to February 26 and the subscription end of the day that is the issue, nearly 10 minutes sold 10 billion. As of March 6, 2007, China’s open-end fund to reach 233.

Awakened the sleeping lion’s — Funds in China (10)

From China’s current economic development of the overall situation, It is expected the national economy in 2007 will continue to maintain a 10% growth rate. 2008 Olympic Games held, will promote China’s rapid economic development. According to authoritative analysis agencies — Goldman Sachs issued a research report : Olympic host country will increase the confidence of the people. This upgrade consumption, the various facilities and upgrade the efficiency of sustained growth. These potential to significantly increase the overall impact of the stock market demand. And in the past 11 Olympic Games experience has shown that the 2001 Olympic Games held before the index rose by an annual average of 25%. Moreover, due to China’s more open economy and the market, and more stringent foreign exchange controls, and the continuous improvement of corporate governance will be effective to prevent asset bubbles. China’s economic development situation of optimism, fund holders still is a wise investment strategy.

Appendix : China Fund Industry Events

Copyright Fund China 2009.

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