China Rolls Out Stock Support Measures as PBOC Plans Swap Ops

Chinese regulators unveiled a series of steps on Monday to steady the country’s slumping stock market, with the People’s Bank of China (PBOC) planning swap operations that could channel more than 100 billion yuan (about US$15 billion) into equities, Reuters reported. The measures, announced by the central bank and the China Securities Regulatory Commission (CSRC), followed meetings with banks, brokerages and fund managers after a prolonged sell-off.

The CSI 300 index fell 8.5% in October, its worst month since early 2016, according to Reuters. investingLive said the decline extended the index’s losing streak to a record 12 straight weeks.

PBOC swap operations

The PBOC said it would hold bidding on Tuesday under its Securities, Funds and Insurance Companies Swap Facility (SFISF), which lets brokers, insurers and fund companies obtain liquidity to buy stocks. According to Reuters, 31 brokers and fund companies had already applied for swaps worth more than 100 billion yuan. Newsquawk, citing Bloomberg, reported the same application figures.

Reuters said this will be the third use of the tool, which was created two years ago. Earlier operations in October 2024 and January 2025 injected a combined 105 billion yuan.

The central bank also pledged to widen participation in the swap facility to securities firms, funds and insurers, moderately lower swap fees and conduct operations when appropriate, Newsquawk reported. Separately, the PBOC cut the interest rate on its relending scheme for share buybacks and shareholding loans to 1% from 1.25%. Reuters said the buyback relending programme will shift from a temporary arrangement to a long-term mechanism.

Regulator urges buybacks

In a separate statement, the CSRC called on major index constituents and leading technology companies to actively repurchase their shares and stabilise their market value, Reuters reported. The regulator said it will push some newly launched exchange-traded funds to build stock positions faster and encourage fund managers to buy shares during the downturn.

The CSRC is also studying plans to ease margin rules to improve liquidity, according to Reuters.

Shares rose on Monday as reports of the planned meetings circulated. The Shanghai Composite Index gained 1.1%, its biggest one-day percentage rise since August 27, Reuters said.

Hao Zhou, a Hong Kong-based analyst at Guotai Haitong Securities, told Reuters the package “sends another strong signal of policymakers’ commitment”.

The moves come as economic data softened. The official manufacturing purchasing managers’ index fell to 49.3 in October from 50.1 in September, slipping below the 50 mark that separates expansion from contraction, TokenPost and investingLive reported.

What’s next

Bidding for the PBOC’s swap operation takes place on Tuesday, November 3. Newsquawk reported that the facility being launched that day has a one-year term that can be extended. The CSRC has not yet set out details of any change to margin rules.

#businessnews