China think tank urges US$281 billion bonds for stability fund
The fund would promote market stability through the buying and selling of blue-chip stocks and exchange-traded funds
CHINA should issue US$281 billion of special government bonds to help create a market stabilisation fund, according to a top government think tank.
The fund would promote market stability through the buying and selling of blue-chip stocks and exchange-traded funds, Chinese media outlet the Paper reported, citing a report from the Institute of Finance & Banking at the Chinese Academy of Social Sciences. The think tank is affiliated with the State Council.
Chinese authorities have been mulling the fund as part of a stimulus blitz kicked off in late September to boost equities and the economy. There have been few details released since then on the fund, while the People’s Bank of China (PBOC) has launched other previously-mentioned programmes.
The central bank has started a specialised re-lending facility to help listed companies and major shareholders buy back shares, as well as a swap facility that allows institutional investors to access liquidity from the PBOC to purchase stocks.
Chinese stocks have lost some steam after staging a historic rally driven by the stimulus measures. The CSI 300 Index is down 7 per cent from this month’s high, trimming its rebound from a September low to about 25 per cent. BLOOMBERG
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