SHANGHAI (Reuters) – China’s central bank launched its stock market support program on Monday, swapping 50 billion yuan ($7 billion) with various financial institutions.
The People’s Bank of China (PBOC) involved 20 institutions in this operation, charging a fee of 20 basis points.
This swap initiative, started on Friday, aims to revitalize China’s stock market amid challenges from a struggling property sector and low consumer spending.
Chinese stocks initially rose after major stimulus measures were announced on September 24, but the momentum has since slowed.
Wang Mengying, an analyst, noted the swap’s goal is to enhance market liquidity, with funding restricted to stock purchases.
The scheme provides easier funding access for brokerages and insurers by allowing swaps of riskier assets for safer investments like treasury bonds.
Some participants include China International Capital Corp, Citic Securities, and E Fund Management Co.
In addition, over 20 major companies, including China Petroleum and Sinopec, plan to utilize central bank loans for share buybacks under a new funding scheme worth 500 billion yuan.
($1 = 7.1111 Chinese yuan)
`
