China unleashes US$483b margin trader to stem stock rout

Beijing

CHINA has created what amounts to a state-run margin trader with US$483 billion of firepower, its latest effort to end a stockmarket rout that threatens to drag down economic growth and erode confidence in President Xi Jinping's government.

China Securities Finance Corp (CSF) can access as much as three trillion yuan (S$660 billion) of borrowed funds from sources including the central bank and commercial lenders, according to people familiar with the matter.

The money may be used to buy shares and provide liquidity to brokerages, the people said, asking not to be named because the information wasn't public.

While it's unclear how much CSF will ultimately deploy into China's US$6.6 trillion equity market, the financing is up to 25 times bigger than the market support fund started by Chinese brokerages earlier this month. That's probably enough to restore confidence amo…