China Central Bank Initiates Share Buyback Program to Revitalize China Stock Market

Thursday, 17 October 2024, 22:57

China's central bank has started a share buyback program to support the China stock market and boost confidence in Chinese stocks. The initiative aims to deliver 300 billion yuan in low-cost loans to help companies buy their own shares. This move is expected to uplift market sentiment and stabilize the economy.
Moneycontrol
China Central Bank Initiates Share Buyback Program to Revitalize China Stock Market

China's Central Bank Takes Bold Steps

China's central bank has rolled out a specialized re-lending facility designed to assist listed companies and critical shareholders in purchasing their own shares, thus fostering optimism in the China stock market.

Key Features of the Program

  • The program offers 300 billion yuan ($42.1 billion) in low-interest loans to qualified commercial banks.
  • Institutional investors can access liquidity through a newly announced swap facility.
  • Both initiatives aim to address the pressing challenges facing the economy and enhance Chinese stocks.

Market Reactions and Future Prospects

The initial response to the PBOC's announcements gave rise to a historic rally in Chinese stocks, with the benchmark CSI 300 Index climbing by 0.8%. However, experts caution that the market requires clearer follow-up measures to maintain this momentum.

Insights from Financial Experts

Investment strategist Billy Leung noted, “It’s a first step, but the market needs clarity on follow-up measures to regain confidence.” The focus is now shifting towards substantial fiscal measures to achieve a sustained recovery in the China stock market.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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