SHANGHAI (Reuters) - China's "National Team" of state-backed investors should refrain from frequent trading, as their recent "buy low, sell high" strategy distorts stock market behavior and discourages new investors, the state-run Economic Information Daily reported on Wednesday.
"National Team" investors, which include the China Securities Finance Corporation, and the Buttonwood Platform Ltd, a unit of China's foreign exchange regulator, trade too frequently, and have effectively become counter-parties for other market players, the newspaper, affiliated to the official Xinhua News Agency, said.
Such a trading behavior is detrimental to the long-term stability of the market, and has encouraged other investors to adopt a more short-term strategy, and made the market less attractive to new investors, the newspaper said.
As of the end of March, "National Team" investors held stakes in 1,221 China-listed companies worth a total of 1 trillion yuan ($153.43 billion), making them a major force in the market, the newspaper reported, citing statistics from Essence Securities.
