New | Beijing pulls in another 100 billion yuan from brokerages to stabilise markets
Beijing has garnered some 100 billion yuan in firepower from 50 brokerages as it makes a fresh bid to stabilise China's stock market, the Securities Times reported late last night.
The brokerages will each contribute 20 per cent of their net assets as of the end of July to a special account held by the China Securities Finance Corp for investments in blue chips and exchange-traded funds.
The move is an add-on to the 120 billion yuan pulled in by 21 brokerages in early July in a landmark measure that pronounced the set-up of the “national team” and the government’s direct intervention in market trading.
As of last night, 13 brokerages confirmed the move that they had signed master agreements with the CSFC.
An announcement by Huatai Securities also gave shape to the scope of the participants. “Risks and income arising from the investment shall be shared by the 50 participating securities firms according to the proportion of their respective investment,” Huatai said in a statement to the Hong Kong bourse last night.
The 21 securities houses that already pitched in in early July will be able to deduct the amount from the second round of fund raising to CSFC, Securities Times reported.
As of the first-half, the top 50 securities firms’ net assets totalled 1.1 trillion yuan, according to data from Securities Association of China. Subtracting the 120 billion yuan contributed in July, the second round of capital stands at about 100 billion yuan.
