Banca March | China has kicked off two programmes totalling up to ¥800 billion ($122.38 billion) aimed at facilitating share buybacks and providing greater liquidity to the markets. Some ¥500 billion will be granted to the swap programme, which allows the exchange of assets – such as corporate bonds or shares of CSI 300 companies – in exchange for highly liquid securities such as government bonds, making it easier for investors to access funding. As many as 20 institutions have already been approved to access this form of liquidity (brokerages, fund managers, among others) and initial applications already exceed ¥200 billion. On the other hand, the remaining ¥300 billion ($42.1 billion) will be used for central bank lending to commercial banks. Financial institutions will act as intermediaries to provide companies and large investors with credit to enable them to buy back shares. The one-year interest rate at which banks will be able to borrow funds is 1.75%, cheaper than the 2% set by the medium-term benchmark rate. For their part, companies will be able to access financing at rates of up to 2.25%.
China initiates two programmes totalling $122.38 billion focused on facilitating share buybacks and providing greater liquidity to markets
