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Chinas state-backed chip fund plans to divest in two tech companies

Chinas state-backed chip fund plans to divest in two tech companies
Chinas state-backed chip fund plans to divest in two tech companies

The largest state-supported semiconductor fund in China has reportedly announced its plan to divest in two of the country’s listed technology firms, a decision which comes after a torrid bull run within the  stock market of China.

The bull run, which is being encouraged by the Chinese state media, has been fueled by indications of an earlier than anticipated economic recovery for the country from the slump caused by the coronavirus, accelerating foreign funds inflows and capital market reforms.

In a recent filing, Sanan Optoelectronics Co. Ltd., stated that the China Integrated Circuit Industry Investment Fund, more commonly known as ‘Big Fund’, has reduced its ownership stake in the firm to 9.29%, a divesture of one percentage point, selling approximately 44.793 million company shares between July 8 and 10, 2020.

The reduction in ownership stake is part of a plan to cut down holdings by more than 2% by January 4th, 2021, as previously announced, according to the company statement.

Meanwhile, NAURA Technology Group Co. Ltd., the second of the listed the companies, in its filing stated that ‘Big Fund’ will make a divesture of approximately 2% in the firm over a six month period. The fund presently holds more than 4,931,000 million company shares and is the company’s third-largest shareholder.

These two share divestures follow similar ones that were conducted last week, when Beijing BDStar Navigation Co., Wuxi Taiji Industry Co., and Shenzhen Goodix Technology Co., stated that ‘Big Fund’ would decrease its ownership stake in the enterprises.

Over the past year, tech stocks have witnessed tremendous surge in the stock market of China owing to the significant state support they have been receiving from the ‘Big Fund’, which is in turn driven by the tensions between Beijing and Washington over the Shenzhen-headquartered Huawei Technologies Co. Ltd.

Source credit: https://in.reuters.com/article/china-fund-sharesale/chinas-state-chip-fund-to-cut-stakes-in-two-more-tech-companies-idINKCN24F09A

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Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for newsorigins.com, spanning the verticals of business, finance, and technology.