MNI BRIEF: PBOC Launches CNY300bln Stock Buy-back Facility
MNI (BEIJING ) - The People’s Bank of China launched its one-year CNY300 billion relending facility targeting stock buy-backs on Friday with an annual interest rate of 1.75%, according to a statement on its website.
The facility, which the Bank can extend if necessary, will incentivise lenders to provide loans to eligible listed companies and major shareholders to support stock repurchases and increases holdings.The loans will be provided by 21 national banks with the interest rate capped at 2.25% in principle. (See MNI INTERVIEW: PBOC Moves, Stimulus To Boost Stocks-BOC's Zong)
After issuing the loans, the banks can apply for relending from the PBOC in the first month of the next quarter, and the central bank will provide relending funds covering 100% of the loan principal.