Feb. 7, 2007 (China Knowledge) - China Securities Regulatory Commission (CSRC) has resumed the issuance of the new funds after a two-month suspension, reported China’s state-owned Securities Journal.

According to the report, the securities regulator had earlier this week approved the application of five new equity funds, including the CCB Principal Fund.

The Mainland stock market had seen a continuous drop since last week before a slight rebound yesterday. The Chinese authorities decided to resume the issuance of new funds, an indication that they are worried about the A-share market. It seems that by allowing fund offerings to resume, the authorities hope that new capital will be injected into the stock market, which will in turn ease the pressure on the A-share market.

The five approved funds will not be launched at the same time and the details will be disclosed at a later date by CSRC, said a manager of a fund management company that had just received approval to issue new funds.

Recently, the poor performance of the A-share market has affected investors’ confidence, which in turn resulted in large-scale fund redemptions. Should the suspension of new fund offerings continue, it will lead to a lack of capital of the market, which will expose funds to bigger redemption risk.