China Mulls Stock Stability Fund, Unlocks $113 Billion From PBOC

China said it will allow institutional investors to tap central bank financing for stock purchases and is weighing plans for a market stabilization fund, sparking the biggest rally since 2020 for the nation’s beaten-down equities.

The People’s Bank of China will set up a swap facility allowing securities firms, funds and insurance companies to tap liquidity from the central bank to purchase equities, Governor Pan Gongsheng said at a briefing on Tuesday. There are also plans to set up a specialized re-lending facility for listed companies and major shareholders to buy back shares and raise holdings.

The moves will unleash ...