China Stock Funds Plunged 41% This Year, Galaxy Securities Says

By Zhang Shidong

July 4 (Bloomberg) -- China's mutual funds that buy stocks lost 41 percent of their value in the first half of the year as equities slumped and investors sold units, according to data compiled by China Galaxy Securities Co.

The combined net asset value of the 287 funds plunged to 1.74 trillion yuan ($254 billion) at the end of June from 2.94 trillion yuan at the end of last year, Beijing-based Galaxy Securities, China's second-largest brokerage by revenue, said in a report published in the China Securities Journal today.

China's benchmark CSI 300 Index slumped 48 percent in the first half on concern inflation at more than a decade-high and surging raw material prices will dent earnings growth. Gains in corporate earnings will slow down further in the third quarter on higher fuel costs, analysts including Chen Li at Shenyin & Wanguo Securities Co. said in an interview this week.

Investors sold 36.3 billion units from the mutual funds in the first six months, according to the Galaxy Securities report. The funds control about 30 percent by value of the tradable shares on the Shanghai and Shenzhen stock markets, it said. About two-thirds of the shares of companies listed in the cities are owned by the state or state-run institutions and are not available for sale.

The following table ranks the top 10 fund management companies by net asset value through June 30, according to China Galaxy Securities Co.

   FIRM                                            ASSETS (YUAN)
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1. China Asset Fund Management Co.                 202.4 billion
2. Boshi Fund Management Co.                       132.1 billion
3. Harvest Fund Management Co.                     120.9 billion
4. China Southern Fund Management Co.              117.6 billion
5. E Fund Management Co.                           110.1 billion
6. GF Fund Management Co.                           82.5 billion
7. Dacheng Fund Management Co.                        78 billion
8. Hua An Fund Management Co.                         72 billion
9. China International Fund Management Co.          69.7 billion
10. Invesco Great Wall Fund Management Co.          57.2 billion
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To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net