China’s central bank added to measures designed to shore up the yuan, making it more costly for traders of forwards contracts to bet on swings in the currency.
The People’s Bank of China will impose a reserve requirement on financial institutions trading in foreign-exchange forwards for clients, according to six people familiar with the matter. The change, which takes effect on Oct. 15, will mandate a deposit of 20 percent of sales to be held at zero interest for a year, said the people, who asked not to be identified because they aren’t authorized to speak on the issue.
http://www.bloomberg.com/news/articles/ ... y-forwards
At 2 p.m. in China, the Stock Market Rescue Suddenly Switches On
Government funds seen buying large-cap shares after declines
World War II victory parade adds pressure to support equities
Afternoons in the Chinese stock market have turned into a waiting game for the state-backed funds to arrive.
Over each of the past four days, China’s SSE 50 Index of large-capitalization companies has rebounded by an average 6.4 percent in late trading from session lows. The gauge surged 15 percent over the four-day period, its biggest rally since 2008 and twice the 8.1 percent gain by the Shanghai Composite Index. The SSE 50 climbed 0.9 percent at the close on Tuesday, erasing an earlier loss of 4.8 percent.
The rallies are driven by government-backed funds buying shares to stabilize the market before a World War II victory parade on Thursday, according to IG Asia Pte. China’s 90 million individual investors have been pulling back from the market, with margin debt in Shanghai falling by $10 billion over the past four days to the lowest level since Dec. 25.
http://www.bloomberg.com/news/articles/ ... -of-stocks