THE president of China’s State-owned investment company Central Huijin Investment Ltd. has stepped down and his resignation was not related to a recent A-share sell-off, Xinhua yesterday quoted a Beijing News report as saying.

    Xie Zhichun submitted his resignation in February and it was approved recently. The decisions were made before the sell-off Thursday, Beijing News cited an anonymous source as saying.

    China’s stock markets plunged Thursday, with indices dropping more than 6 percent in record high turnover as news that Central Huijin had reduced its holdings in major State-owned banks swirled in the markets and investors rushed to sell after more brokerages tightened margin trading requirements for clients.

    “The resignation has nothing to do with the A-share sell-off,” the paper cited the source as saying.

    Xie, 56, started his position at Central Huijin in May last year, according to the paper.

    Central Huijin sold its 1.91 billion yuan (US$312.46 million) stake in China Construction Bank and 1.63 billion yuan stake in Industrial and Commercial Bank of China on Tuesday, Central Huijin said late Thursday.

    Central Huijin’s disclosure came a day after public data from the Hong Kong stock exchange showed that Huijin had reduced its holdings in the two banks.

    Central Huijin’s sale was part of its recent moves to reduce holdings in financial institutions and exchange traded funds (ETFs), according to separate statements published by Huijin and the two lenders.

    Tian Weidong, analyst at Kaiyuan Securities in Xi’an, said that the sharp drop in financial firms Thursday was partly due to news that Central Huijin sold its stakes in the two banks.

    But he added that many investors were already looking for a reason to sell and the changes to margin financing and Huijin sale sparked the stampede.

    “Many investors have become very cautious and are looking for a reason to take the profits they have already earned,” he said. (SD-Agencies)