(Yicai Global) Aug. 21 -- Many companies listed on the A-share market have used idle investor funds or their own money to buy financial products.

As of August 18, 868 such enterprises held 6,898 financial products worth a record-high USD422 billion (CNY634.8 billion), compared with an aggregate value of CNY448.3 billion last year, the Beijing News reported.

The China Securities Regulatory Commission issued a regulatory guidance that relaxed restrictions on idle funds raised by listed groups on December 21, 2012. It allowed them to use these funds to purchase safe and high-liquidity investment products, including government bonds and bank's financial products.

The policy effectively stimulated enthusiasm to buy financial products among listed firms. The number of listed companies engaging in such practices increased every year since 2011 except last.

"Purchasing financial products is a normal way for listed companies to utilize temporarily idle funds," a board secretary of a listed company in Central China said. "Generally, they purchase low-risk guaranteed financial products offering higher interest rates than the bank over the same period, thereby reducing financial costs. Other financial management methods are riskier, and typically listed companies will not use them."

Financial products have become a major source of profit for some listed companies. CITIC Guoan Wine Co.'s [SHA:600084] semiannual report, which it released on August 10, shows that the company reaped earnings of CNY18 million from financial products in the first half of this year. The group reported a net loss of CNY47.7 million in the same period. The company posted a net profit of CNY12.7 million last year, with CNY56.4 million in financial product earnings.

Some 42 percent of the money that listed companies used to buy financial products was sourced from their own funds, while 58 percent was backing from investors that was not being used, state-run Xinhua news agency once reported.