This week, China's Central Bank (the PBOC) has announced a slew of measures. 02 policy measures are of significant importance to investors in China listed companies.
Quoting from the central bank's website, a summary of the policy measures are:
(i) 500 billion yuan swap facility being able to be usef for stocks ETF or China listed CSI300 shares as collateral and importantly;
(ii) the central bank lending to commercial banks 300 billion yuan of loans at 1.75% interest where china banks will then lend out at 2.25% for share buybacks or founders to increase their stake. This strategy mirrors what Japan has done in the past and this should boost China companies' share prices.
The PBOC has said it will consider injecting more money for the above 02 measures if it is doing well by doubling the amount allocated.
Significance to the Market
Part (ii) to me is good. China companies are known to be high dividend yielders at 6-9%...