SHANGHAI Pudong Development Bank today kicked off a mainland fund venture with French financial firm AXA, joining a raft of rival lenders to tap the country's booming capital markets.

AXA SPDB Investment Managers Co, which is 51 percent held by Pudong bank, has registered capital of 200 million yuan (US$26.5 million). AXA Investment Managers controls 39 percent of the venture while Shanghai Dragon Investment owns the balance.

Chinese securities watchdogs are encouraging institutional participation into a stock market that used to be denominated by retail investors to help steady market performance.

The mainland capital industry now hosts 59 mutual fund management companies, among which 28 are partly funded by overseas institutions. These firms have more than two trillion yuan in combined assets under management.