Chinese regulators express support for capital markets ahead of Trump’s inauguration
The move is seen by some participants as an effort to boost investor confidence in times of uncertainty
China’s central bank and securities regulator held a symposium recently on a relending programme for stock repurchases and shareholding increases, in an effort to use policy tools to stabilise the capital markets, according to a statement released by the regulators on Sunday night.
The programme, which allows listed Chinese companies and key shareholders to apply for loans with low interest rates to fund stock buy-backs and stake increases, was launched in mid-October. Since then, more than 300 listed companies have unveiled plans to tap into the facility, according to the statement. They have borrowed more than 57 billion yuan (US$7.8 billion) from the programme, or about 20 per cent of the 300 billion yuan initial quota, which may be extended in the future, according to state-owned media outlet Securities Daily, quoting data compiled from Wind.
“The positive effects of the policy tool are gradually becoming evident, playing a significant role in maintaining the stable operation of the capital market and boosting market confidence,” the statement said.
Chinese stocks surged after Beijing introduced a number of measures to boost the sluggish economy in late September. The CSI 300 Index jumped 21 per cent in September, the largest monthly gain in nearly a decade. But the rally started to lose momentum in October as subsequent policies disappointed investors. And later on, Trump – who threatened to apply 60 per cent tariffs on Chinese imports – won the US presidential election.
