Photo : Collected
China's central bank boosted support for markets Thursday by opening up tens of billions of dollars in liquidity for firms to buy stocks as part of a raft of measures by Beijing to kickstart the country's flagging economy.
Authorities last month unveiled several stimulus policies -- from interest rate cuts to relaxing home-buying rules -- after struggling since the end of Covid restrictions to reignite growth and get business activity back on track.
The news lit a fire under mainland and Hong Kong equities on renewed hopes that officials would finally get a grip on the issues that have dogged the economy for years, particularly a property debt crisis and tepid consumer spending.
That euphoria was dampened Tuesday as a much-anticipated news conference ended with just a pledge to meet the country's annual growth target but no more measures and no detail on those already announced.
But on Thursday the central bank fleshed out plans to encourage "the healthy and stable development of the capital market" by opening up a "swap facility" worth 500 billion yuan ($70.6 billion) that will allow firms to access cash to buy stocks.
Companies will be allowed to use equities, bonds and other assets as collateral for "high-grade liquid assets such as treasury bonds and central bank bills", it said.
The programme may be "further expanded depending on the situation", it added.
Shanghai shares rose more than one percent in early trade and Hong Kong added more than two percent.
The measures were first announced last month alongside a raft of stimulus measures that triggered a blistering rally that sent markets up more than 20 percent.
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