Business / Markets

Stocks surge on PBOC's move to expand relending plan

By Dai Tian ( Updated: 2015-10-12 15:53

Stocks surge on PBOC's move to expand relending plan

An investor gestures in front of an electronic screen showing the stock composite index at a brokerage house Nanjing, Jiangsu province, Oct 12, 2015.[Photo/IC]

Stocks rallied on Monday after central bank announced over the weekend that it would expand a pilot program allowing banks to refinance high-quality credit assets.

The benchmark Shanghai Composite Index closed at 3,287.66, up 3.3 percent, while the Shenzhen Component Index jumped 4 percent to 10,961.36.

Brokerages and financial software developers led the gains. Guoyuan Securities, Sunyard System Engineering Co and Hundsun Technologies Inc surged by the daily limit of 10 percent. Huatai Securities and Sinolink Securities rose 8.7 and 8.5 percent respectively.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises listed in Shenzhen, advanced 4.5 percent to close at 2,316.78 points.

Turnover climbed up for a fifth trading day, with a total of 925.24 billion yuan worth of stocks changing hands at the two markets on Monday.

The stock rally came amid renminbi's appreciation. Yuan rose for a seventh day on Monday to 6.3406 per US dollar, hitting its highest level since Aug 12.

In the latest move to support the economy, Shanghai, Beijing, Chongqing and six other provinces and municipalities will allow banks to refinance high-quality credit assets rated by the People's Bank of China, said the central bank, as the program was first introduced in Guangdong and Shandong provinces last year.

Such policy tool, poised as supplements to the current collateral rules, aims to promote the efficiency and flexibility of the policy management, support smaller firms and bolster the real economy, said the statement.

The CSI 300 Index gained 3.2 percent to close at 3,447.69 points on Monday.

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