Hong Kong Stocks Surge Following Unveiling of Swap Facility by China’s Central Bank
Hong Kong and Chinese Stocks Rebound
Hong Kong and Chinese stocks rebounded from recent sell-offs following the People's Bank of China's unveiling of a new funding facility designed for buying stocks. As of 9:52 am local time, the Hang Seng Index rose 2.5% to 21,157.38, with the Hang Seng Tech Index increasing by 2.2%. The CSI 300 Index and the Shanghai Composite Index both added 0.8%.
New Liquidity Measures Launched
The central bank introduced a new swap tool with an initial size of 500 billion yuan (US$70.7 billion) aimed at enhancing liquidity in the stock market and promoting the healthy development of capital markets. The new Securities, Funds and Insurance Companies Swap Facility will enable qualified entities to use government bonds or central bank bills with corporate bonds or stock exchange-traded funds as collateral.
Next Steps
- Immediate acceptance of applications for the new facility.
- Potential expansion of the swap facility size.
Investors are optimistic about these measures and their potential impact on the market.
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