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August 31, 2016

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Repos help shares to stay above water

SHANGHAI stocks edged up yesterday as the market took its cue from the injection of capital by China’s central bank via reverse purchase agreements.

The Shanghai Composite Index gained 0.15 percent to finish at 3,074.68 points yesterday.

The People’s Bank of China has pumped 50 billion yuan (US$7.5 billion) of funds into the market since August.

However investors still held a “wait-and-see” stance according to Gu Yongtao, a strategic analyst at Cinda Securities.

“The reverse repos action also means the central bank is less likely to ease monetary policies in the short term,” Gu said.

China Minsheng Banking Co gained 1.19 percent to 9.35 yuan and Shanghai Pudong Development Bank rose 1.05 percent to settle at 16.40 yuan.

Gao added the yuan may face devaluation pressure after the US Federal Reserve said the case for raising interest rates was strengthening. Fed Chairwomen Janet Yellen said on Friday the US central bank might hike interest rates in coming months.


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