Business · Markets · 4 hrs ago
China expands stock market support measures
China is expanding two programs to support its stock market.
The People’s Bank of China will lower fees for a swap facility used by securities firms, funds and insurers, and reduce the rate for bank loans funding share buybacks from 1.25% to 1%.
The share-buyback loan program will become permanent, and banks will be encouraged to lend more under it.
The tools were introduced in October 2024, as authorities tried to shore up the market.
The move comes after a steep market decline: the CSI 300 fell 8.5% in October, its worst monthly drop in more than a decade, and fell for 12 straight weeks through Friday.
Regulators are also widening access and easing buyback rules to improve market liquidity and encourage companies to support their share prices.
Beijing hopes a steadier market will build confidence and persuade households to invest savings in shares, but many remain wary.
A third round of swap operations is due to begin in coming days, with 31 securities and fund firms approved to take part.
China will expand the use of two stock-market support tools and change their terms to support market stability and investor confidence.
The People’s Bank of China will lower the rate on its share-buyback relending facility to 1% from 1.25% and make the program permanent.
The central bank will also increase participation in its swap facility for securities firms, funds and insurers, and moderately lower its fees.
The securities regulator said a third round of swap operations will begin in the coming days, with 31 securities and fund firms approved to participate.
The measures come as Chinese shares face a slump and household investors remain wary of equities.
- Who
- The People’s Bank of China and the China Securities Regulatory Commission announced the measures.
- What
- China will expand and adjust two stock-market support tools. The measures include lower relending rates and fees, broader participation and changes to share-buyback rules.
- When
- The central bank announced the measures on Monday. A third round of swap operations is due to begin in the coming days.
- Where
- China.
- Why
- Authorities aim to support market stability and confidence. The measures are also intended to encourage lending for share buybacks and stake increases.
This story does not have two clearly opposing sides.
The two stock-support tools were introduced as Beijing sought to shore up the stock market.
The PBOC announced changes to the tools after a meeting with financial regulators and institutions.
The CSRC said a third round of swap operations will begin, with 31 securities and fund firms approved to participate.
- Relending rate
- 1%, down from 1.25%
- Approved swap participants
- 31 securities and fund firms
- Swap quotas sought
- More than 100 billion yuan
- Buyback and stake-increase loans contracted
- About 440 billion yuan
- Swap facility outstanding balance
- 105 billion yuan
What people are saying
The government wants to be seen as supportive, or investor confidence could decline even further