PBOC Governor Pan: PBOC provides specific directions for stock buybacks and reloans to increase holdings

People's Bank of China (PBOC) Governor Pan Gongsheng said on Friday that the Chinese central bank “provided specific directions for stock buybacks and reloans to increase holdings, and it is the bottom line that credit funds cannot enter the stock market in violation of regulations.”

Further comments

Central bank's provision of stock buyback and additional purchase re-loans has specific directional aims, and a fundamental bottom line is that loan funds must not unlawfully enter the stock market.

The two tools to support the stable development of the capital market are entirely based on market-oriented principles, and swap facility is not direct financial support from central bank.

Meanwhile, China’s central bank announced that it launched a swap facility for securities, funds and insurance companies on Friday.

Additional takeaways

Currently, 20 securities and fund companies are approved to participate in the swap facility operation, with the first batch of application quotas exceeding 200 bln yuan.

Officially launched the securities, fund, and insurance company swap facility (SFIFS) operation starting today.