People's Bank of China now seeking to stick a floor under Chinese stock markets
PBOC Governor Yi Gang
- recent stock market fluctuations largely due to investor sentiment, expectatons
- China's economic fundamentals are good, macro leverage levels stabilising
- Current stock market valuations are at a relatively low level
- stock market valuations not in line with china's economic fundamentals
- central bank studying targeted measures to help financing problems of companies
- will push forward plans to support private firms' bonds financing
- Will use monetary policy tools including MLF to boost lending to private firms
(MLF is the medium term lending facility which is normally money lent to banks)
This is a concerted effort, be surprising if there isn't a pop in China stocks.
- Earlier China Banking and Insurance Regulatory Commission comments to prop stocks up also