China Weighs Stock Market Rescue Package Backed by $278 Billion

Bloomberg01-23

China considers offshore money for stabilization fund: sourcesSome policy measures could come as soon as this weekChinese authorities are considering a package of measures to stabilize the slumping ...

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Comments

bullChew
01-24
bullChew
No confident. Sell on news.
Toby_Chua
01-23
Toby_Chua
China does not believe in printing more money to boost short term growth like what has been done in the west. They are deleveragging responsibly which needs time but the market does not have the patience n pull the funds out to buy higher high Japan n USA markets. Unfortunately Chinese bullets are not as much as western funds which draw or suck in money from whole world to manipulate the play book. Once Chinese n HKG shares are driven down to attractive level they would arrive to mob up the shares n control the board n companies... history is repeating itself like what Japan faced in early 1990.... hopefully China can put up a good fight n God bless them
Guavaxf30
01-23
Guavaxf30
$278b from offshore accounts? Does this mean they will be selling off external assets to fund this? Meaning US stocks and bonds?
TigerVision888
01-23
TigerVision888
The measures will still fail. People do not want state funds in private enterprises. The general consensus is for you to cut interest rates. That's all that matters.

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They have also earmarked at least 300 billion yuan of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd., the people said.Officials are also weighing other options and may announce some of them as soon as this week if approved by the top leadership, the people said. The plans are still subject to change. The China Securities Regulatory Commission didn’t respond to a request for comment.The deliberations underscore the elevated level sense of urgency among Chinese authorities to stem a selloff that sent the benchmark CSI 300 Index to a five-year low this week. Calming the nation’s retail investors, many of whom have been bruised by the protracted property downturn, is also seen as key to maintaining social stability.A gauge of Chinese stocks listed in Hong Kong jumped as much as 3.8%, the most since Nov. 15, after falling to near-19-year lows on Monday. The onshore benchmark CSI 300 erased an earlier decline of 1% to edge higher. Both onshore and offshore yuan reversed earlier losses, while yields on the 10-year government bond rose one basis point to 2.5%.Whether such measures will be enough to end the rout is far from certain. The property crisis, depressed consumer sentiment, tumbling foreign investment and diminished confidence among local businesses after years of volatile policymaking are exerting strong downward pressure on both the economy and financial markets. Past efforts to shore up the stock market, most notably in 2015, proved insufficient at best and at times counterproductive. Authorities have also been reluctant to roll out major economic stimulus of the sort that many equity investors have called for.At a State Council meeting on Monday, chaired by Li, China’s cabinet received a briefing on the operations of the capital markets as well as considerations for related work, according to an official statement, which didn’t provide more details on what Beijing is mulling.“This is a massive boost to confidence,” said Li Weiqing, fund manager at JH Investment Management Co. “The state council comments also affirm that the top policymakers are attaching high importance on this matter, but whether the gains can sustain after the buying or if people will sell into the rally, is hard to tell right now.”In all, more than $6 trillion has been wiped out from the market value of Chinese and Hong Kong stocks since a peak reached in 2021, underscoring the challenge that Beijing faces as it seeks to arrest a decline in investor confidence.China’s piecemeal moves in recent months to boost market sentiment were met with a large degree of despondency from traders, with some calling for more forceful stimulus. Beijing has restricted short selling and state funds stepped in to buy shares of big banks. The formation of a state-backed stabilization fund has been contemplated since at least October, though some raised doubts over its efficacy.Confidence in China’s markets has been hurt over the past years by President Xi Jinping’s growing control over private enterprise, which has included a crackdown on the country’s tech giants. International banks who were planning a massive expansion in the country are now tempering their ambitions to build platforms in the world’s second-largest economy.“The potential support package should be able to stem declines in the short term and stabilize markets into the Lunar New year, but state buying alone has historically had limited success in turning around market sentiment if not followed up by further measures,” said Marvin Chen, strategist at Bloomberg Intelligence.During the 2015 rout, Beijing tapped China Securities Finance Corp. as its main stabilization vehicle by allowing it to access as much as 3 trillion yuan of borrowed funds from sources including the central bank and commercial lenders. The money was used to buy stocks directly and provide liquidity to brokerages. Even so, the turbulence didn’t end until a year later.This time, officials are seeking to use offshore money to minimize impact on an already weakening yuan, said the people.China’s stock meltdown is adding pressure on so-called snowball derivatives, which are structured products that promise bond-like coupons as long as the underlying assets trade within a certain range. The CSI Smallcap 500 Index, a pricing reference for some of these products, slipped 4.7% on Monday, taking it below an earlier estimated threshold that may trigger widespread losses on the snowballs.The nation’s largest brokerage Citic Securities Co. last week stopped short selling services for some clients after so-called window-guidance from regulators, Bloomberg has reported.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[{"id":266353078710312,"gmtCreate":1706063131649,"gmtModify":1706063136314,"author":{"id":"3579084168104345","authorId":"3579084168104345","name":"bullChew","avatar":"https://community-static.tradeup.com/news/840d59e25bb1b4e0e94539f090534454","vip":1,"hat":"https://static.tigerbbs.com/ae1f49570794979e009a5efdeb6f4789","crmLevel":7,"crmLevelSwitch":1},"htmlText":"No confident. Sell on news.","listText":"No confident. Sell on news.","text":"No confident. Sell on news.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/266353078710312","repostId":2405163174,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":266125006205184,"gmtCreate":1705992466073,"gmtModify":1705993222532,"author":{"id":"3576326749731922","authorId":"3576326749731922","name":"Toby_Chua","avatar":"https://community-static.tradeup.com/news/82ec063fd73ccbceee82eab015cdf3fd","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":6,"crmLevelSwitch":1},"htmlText":"China does not believe in printing more money to boost short term growth like what has been done in the west. They are deleveragging responsibly which needs time but the market does not have the patience n pull the funds out to buy higher high Japan n USA markets. Unfortunately Chinese bullets are not as much as western funds which draw or suck in money from whole world to manipulate the play book. Once Chinese n HKG shares are driven down to attractive level they would arrive to mob up the shares n control the board n companies... history is repeating itself like what Japan faced in early 1990.... hopefully China can put up a good fight n God bless them","listText":"China does not believe in printing more money to boost short term growth like what has been done in the west. They are deleveragging responsibly which needs time but the market does not have the patience n pull the funds out to buy higher high Japan n USA markets. Unfortunately Chinese bullets are not as much as western funds which draw or suck in money from whole world to manipulate the play book. Once Chinese n HKG shares are driven down to attractive level they would arrive to mob up the shares n control the board n companies... history is repeating itself like what Japan faced in early 1990.... hopefully China can put up a good fight n God bless them","text":"China does not believe in printing more money to boost short term growth like what has been done in the west. They are deleveragging responsibly which needs time but the market does not have the patience n pull the funds out to buy higher high Japan n USA markets. Unfortunately Chinese bullets are not as much as western funds which draw or suck in money from whole world to manipulate the play book. Once Chinese n HKG shares are driven down to attractive level they would arrive to mob up the shares n control the board n companies... history is repeating itself like what Japan faced in early 1990.... hopefully China can put up a good fight n God bless them","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/266125006205184","repostId":2405163174,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":266083862917280,"gmtCreate":1705982315890,"gmtModify":1705982320939,"author":{"id":"3576140222331577","authorId":"3576140222331577","name":"Guavaxf30","avatar":"https://static.tigerbbs.com/1ff15ff6aa254c9130f9af922f7e2447","vip":1,"crmLevel":9,"crmLevelSwitch":1},"htmlText":"$278b from offshore accounts? Does this mean they will be selling off external assets to fund this? Meaning US stocks and bonds?","listText":"$278b from offshore accounts? Does this mean they will be selling off external assets to fund this? Meaning US stocks and bonds?","text":"$278b from offshore accounts? Does this mean they will be selling off external assets to fund this? Meaning US stocks and bonds?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/266083862917280","repostId":2405163174,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":266082683531320,"gmtCreate":1705982014934,"gmtModify":1705982020212,"author":{"id":"4146204832639872","authorId":"4146204832639872","name":"TigerVision888","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0},"htmlText":"The measures will still fail. People do not want state funds in private enterprises. The general consensus is for you to cut interest rates. That's all that matters.","listText":"The measures will still fail. People do not want state funds in private enterprises. The general consensus is for you to cut interest rates. That's all that matters.","text":"The measures will still fail. People do not want state funds in private enterprises. The general consensus is for you to cut interest rates. That's all that matters.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/266082683531320","repostId":2405163174,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":23,"commentSize":0,"repostSize":2,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2405163174"}