China Indexes Advanced 3% After PBoC Launched $70 B Swap Facility

Li Chen
10 Oct, 2024
Hong Kong

Financial markets in mainland China and Hong Kong rebounded after the central bank launched its lending plan to facilitate liquidity in the stock market. 

The Hang Seng index jumped nearly 4%, and the mainland-focused CSI 300 index advanced as much as 3%. 

The People's Bank of China launched its 500 billion yuan swap plan for "qualified brokerage firms, life insurance, and asset management companies to exchange their bond holdings for Treasury bonds and bills," according to the statement released by the central bank. 

The move is part of the 800 billion yuan plan announced by the central bank a few weeks ago to stabilize financial markets. 

The central bank also plans to facilitate stock buyback plans and stake increases by listed companies and major shareholders. 

Investors are also looking forward to a press conference by Finance Minister Lan Foan on Saturday, and market participants are anticipating the release of new fiscal measures. 

China's stock markets have been volatile over the last four weeks after the People's Bank of China unexpectedly announced monetary measures to increase liquidity in the financial system. 

However, China's top leadership signaled the possibilities of more fiscal measures at a hurriedly scheduled meeting ahead of the start of the Golden Week holiday; however, those expectations have not been met so far. 

The world's second-largest economy is struggling to meet the 5% annual GDP growth target rate set by the top leadership, and many economists have lowered their 2024 growth estimate to 4.6%. 

Financial markets are expected to remain volatile until the government implements measures to revive the residential property market and boost consumer spending. 

Financial markets in Hong Kong are close on Friday for a holiday, and the Hang Seng index decreased nearly 3% in the shortened week of trading.

 

China Stock Movers 

The Hang Seng index increased 3.7% to 21,400.54, and the CSI 300 index advanced 2.4% to 4,051.56. 

Longfor Group increased 7% to HK $13.42, China Vanke increased 7.5% to HK $7.36, and China Resources Land advanced 2.9% to HK $25.90. 

Sun Hung Kai Properties decreased 0.8% to HK $84.95, and New World Development added 1.3% to HK $8.63. 

Life insurance companies traded higher after China's central bank launched swap facilities that could provide additional liquidity to purchase more stocks.

China Life increased 5% to HK $16.50, and Ping An Insurance advanced 6% to HK $51.0. 

Haitong Securities and Goutai Junan Securities jumped the daily limit of 10% in mainland trading after both companies announced a detailed merger plan. 

Both brokerages traded for the first time after being suspended from trading on September 5. 

In Hong Kong, Haitong Securities soared 97% to HK $7.13.