Central Huijin Company announced that it firmly believes in the development prospects of China's capital market, fully recognizes the current value of A-share allocation, and will continue to increase holdings in the future, resolutely maintaining the stable operation of the capital market. As soon as the news came out, the market immediately responded positively, with a collective increase in trading volume for the Shanghai and Shenzhen 300 ETFs in the late trading session, resulting in a significant increase in trading volume. Multiple indicators such as the Shanghai Composite Index and the Shenzhen Component Index narrowed their declines. Wang Qing, Chief Macro Analyst of Dongfang Jincheng: Amidst the sudden increase in global economic and trade environment variables and severe fluctuations in the global financial market, the "national team" has taken timely action, releasing strong policy signals that can effectively guide market expectations, prevent market overshoots, and alleviate external shocks. Central Huijin is a state-owned sole proprietorship established by the state and is known as the "national team" in the market. As a stabilizer of the capital market, Central Huijin plays a key role in market fluctuations. When the stock market faces downward pressure, Central Huijin often injects liquidity into the market by increasing its holdings of bank stocks or open-end index funds ETFs, providing strong support and stabilizing market confidence. Especially in the past two years, it has significantly increased its holdings of ETF funds, thereby significantly strengthening its efforts to support the market. Why choose to increase holdings of trading open-end index funds? In the announcement released by Central Huijin on April 7th, it was clearly stated that increasing holdings of trading open-end index funds, also known as ETFs, is another increase. Experts have also interpreted this operation. Experts say that based on the trading volume before the A-share market closed on Monday, Central Huijin's main increase in holdings this time is tracking trading open-end index funds including the Shanghai and Shenzhen 300, Shanghai 50, etc. These funds cover stocks with a wide range of industries and significant market capitalization, which have a strong impact on the index. Liu Bing, member of the Executive Committee of China Galaxy Securities: Central Huijin has increased its holdings in the core broad-based index of the A-share market, which has strong market representativeness and investment value, and accommodates major constituent stocks and industry leaders in Shanghai and Shenzhen. The act of increasing holdings can play a role in stabilizing the index and the overall market, while sending a clear signal to the market to firmly maintain the stable operation of the capital market. It is worth noting that this announcement emphasizes "increasing holdings again". The reporter found through reviewing public information that in recent years, whenever the A-share market fluctuated violently, Central Huijin maintained market stability by buying trading open-end index funds. And last year, Central Huijin announced the expansion of its holdings in trading open-end index funds. The latest data shows that by the end of 2024, the allocation scale of Central Huijin to trading open-end index funds has reached 1.05 trillion yuan. Wang Kai, Chief Analyst of Guosen Securities Strategy: As a "national team", Central Huijin has increased its holdings of trading open-end index funds, which not only reduces the risk of a single company by diversifying its investment in a basket of stocks, but also conveys policy signals of national stability expectations and market protection through market-oriented means. This demonstrates the macro considerations of guiding long-term funds into the market and preventing systemic financial risks, which can maintain overall market stability while avoiding excessive intervention in individual stocks. Expert: China's economic foundation is stable and resilient. Experts say that the increase in holdings by Central Huijin will help stabilize market fluctuations and boost market confidence in the short term. In the medium to long term, it will be conducive to deepening capital market reforms and supporting the development of the real economy. In addition, besides the increase in holdings by Central Huijin, the "national team" also has many tools to stabilize the stock market. Experts believe that the following tools for stabilizing the stock market, including the People's Bank of China's two special tools to support the capital market, fiscal policies and capital market reform measures, are still sufficient. More importantly, in the face of external shocks, the supporting conditions and basic trends for China's macroeconomic foundation to be stable, resilient, and have great potential have not changed. The data shows that the PMI in March was 50.5%, running in an expansion range for two consecutive months, and foreign exchange reserves remained stable above $3.2 trillion for 16 consecutive months. Wang Qing, Chief Macro Analyst of Dongfang Jincheng: Recently, the macro economy has been stable and improving, significant breakthroughs have been made in technological innovation, and the trend of China's asset revaluation has not changed. Focusing on dealing with various uncertainties and stabilizing the macroeconomic situation, there is ample room for current macroeconomic policies. These will continue to provide valuation advantages for the Chinese capital market. (New Society)