Shanghai agency caught in the stock market

A prominent Shanghai government departments has been using its capital to invest in three listed company, against explicit bans to do so, the Financial Times writes. The Shanghai Municipal Housing Maintenance Fund Management has been one of the top-10 shareholder in a variety of companies at the Shenzhen stock market. The agency is in charge of maintaining public spaces and get a levy of two percent on each purchase of apartments.

Fraser Howie, an expert on the Chinese stock market, said it was probable that other government units – including state-owned companies, local government, the police and the army – had been investing surplus funds in the stock market and their holdings could be as high as $125bn.

It reflects the worries by Hu Shuli, chief-editor of the financial magazine Caijing, who blamed the government for not doing enough to stop illegal activities at the stock markets.