(Yicai) July 20 -- China’s “national team” of state investment funds have poured about CNY60 billion (USD8.9 billion) into listed shares of state-owned enterprises in an effort to shore up stocks following a sharp market pullback as global technology stocks reset.

China Reform Holdings and its affiliates have invested more than CNY50 billion through special relending facilities for share buybacks and stake increases, along with matching capital, it announced late yesterday, while China Chengtong Holdings Group said that it and its affiliated investment vehicles had spent nearly CNY10 billion to boost their stakes in listed central SOEs.

The “national team” is a term used to describe a group of Chinese state-backed financial institutions, including China Reform, China Chengtong, and Central Huijin Investment, that can buy stocks and exchange traded funds during market stress to support prices and investor confidence.

Both China Reform and China Chengtong noted that they will continue making substantial share purchases, pledging to "resolutely safeguard the strategic value of core stock assets and maintain the stable and healthy development of the capital market." China Chengtong added that future investment targets will include stocks and ETFs of central SOEs and technology companies.

The Chinese market has sold off since the start of this month, largely in response to a sharp correction in global tech stocks. The Shanghai Composite Index and Shenzhen Component Index had declined 9.1 percent and 16.5 percent, respectively, this month as of July 17. Meanwhile, the ChiNext and Star Market Composite growth stock indexes had plunged 22.2 percent and 24.5 percent.

Volatility in overseas markets and the spillover of heightened risk aversion have been key factors behind the unusually steep correction in China’s stock market this month, Li Qiuxu, chief domestic strategy analyst at China International Capital Corporation, told Yicai.

In response to regulatory calls and supportive measures to stabilize the capital market, several listed firms unveiled share repurchase plans over the weekend. Several private equity funds also announced schemes to buy back their own funds.

Lingjun Investment said the hedge fund and senior managers had pledged to spend CNY200 million (USD29.5 million) buying its private security fund products in the next two weeks.

Multiple listed firms, including Guolian Minsheng Securities, HuaAn Securities, Olympic Circuit Technology, Jalong Micro-Nano New Materials, Focus Hotmelt, and RemeGen, unveiled share buybacks yesterday. DR Laser Technology said that Board Secretary Qiao Duan will personally invest over CNY500,000 (USD73,830) to raise his shareholding.

Major listed SOEs, including Aluminum Corporation of China, CRRC, Three Gorges Renewables Group, SDIC Power Holdings, and China Coal Energy, also announced share buyback plans by their state-owned controlling shareholders today.

The China Securities Regulatory Commission will convene representatives from securities firms, fund managers, and listed companies today to solicit opinions and proposals on promoting the stable and healthy development of China's capital markets, China Central Television said on Weibo yesterday. This can be seen as another positive regulatory signal to calm market sentiment.

SDIC Securities said in a recent research note that, following more than two weeks of sharp declines, much of the deleveraging pressure in China's equity market has already been absorbed. HuaAn Securities similarly argued in its latest report that the current correction has pushed the market into oversold territory.

Meanwhile, earnings guidance released by many listed tech firms points to strong first-half results, providing fundamental support to halt the market downturn.

Editors: Tang Shihua, Futura Costaglione