China’s Ministry of Finance has transferred its stakes in a group of financial firms to a government-controlled fund as Beijing steps up its push to overhaul the financial sector.
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The asset reshuffle will allow Central Huijin Investment – a subsidiary of China’s sovereign wealth fund, China Investment Corporation – to take controlling stakes in five companies, which include three national asset management firms.
The move is part of Beijing’s push to improve asset quality in the financial system, analysts said, but it has also raised market expectations of further government moves to stabilise the stock market and consolidate the securities industry.
Beijing has been encouraging mergers and acquisitions in the financial sector as part of a strategy to create a group of world-class Chinese investment banks.
Central Huijin now has a total of eight securities companies under its control following the deal, with its latest acquisitions including China Cinda Asset Management, China Orient Asset Management, China Great Wall Asset Management, China Securities Finance and China Agriculture Re.
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The market will be closely watching how Central Huijin integrates the firms, analysts at Citic Securities said in a note published on Sunday.
“The equity adjustment of these securities companies to put them under the umbrella of Huijin is expected to promote a new round of mergers and acquisitions in the securities industry,” said Tian Liang, an analyst at Citic Securities.