Top stories of the day ? China Stock Market ? Aug.6
Thursday, August 05, 2021 10:51 PM

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Aug. 5, 2010 (Xinhua News Agency) -- Top stories of the day -- China Stock Market -- Aug.6

BEIJING, Aug.6 (Xinhua) ?

1. The People's Bank of China (OOTC:BACHY) (PBOC), China's central bank, said Thursday it would maintain its moderately loose monetary policy and enhance financial supports to boost the economy' sustainable development.

The central bank will apply multiple monetary tools to keep an appropriate growth in money supply in a bid to strike a balance between meeting the need of funding economic development and managing the inflation expectation, the PBOC said in a statement posted on its website.

Comment: the remark of PBOC will boost confidence of stock investors on the capital liquidity of the market.

2. China's banking regulator, the China Banking Regulatory Commission (CBRC), has suggested that commercial banks suspend the granting of loans for people to purchase their third homes in Beijing, Shanghai, Shenzhen and Hangzhou.

The CBRC is also reportedly requiring banks to raise down payments to 60 percent and charge an interest rate that is 50 percent higher than the benchmark rate for the purchases of third homes in other areas.

China's loans to the real estate industry dropped significantly since May with the implementation of various controlling policies on the real estate industry, said the People's Bank of China, China's central bank, in its report on monetary policy implementation for the second quarter.

By the end of June, financial institutions' outstanding loans to the real estate industry reached 8.71 trillion yuan, up 40.2 percent year on year, but the growth rate went down 4.1 percentage points from the end of the previous quarter.

Comment: the continuous control on the loan granting to third homes shows the government is still insisting tight policies on the real estate market. Real estate stocks will be lashed.

3. China's insurance regulator issued detailed rules on Thursday governing how insurers invest their profits, which reiterated the ban on direct investment in property development and specified the ratio of funds that insurers could invest in new sectors such as unlisted companies.

Insurance companies will be allowed to invest maximum 10 percent of their assets, as of the latest quarter, in the property market, according to the Provisional Measures on Insurance Capital Uses posted on the website of the China Insurance Regulatory Commission.

Further, insurance companies will be allowed to invest up to 20 percent of their assets in the stock market and up to 5 percent in purchasing stakes in unlisted companies.

They are permitted to invest up to 20 percent of their assets in unsecured corporate bonds and debts of non-financial enterprises and up to 5 percent in debt related to infrastructure projects.

Comment: the policy is expected to benefit the insurance industry for a long term's view. But as the market already holds the expectation, it will not stimulate insurance stocks largely in short term. (Edited by Sun Huanjie, sunhj@xinhua.org)

 

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