As of now, bank of china has reached cooperation intentions with nearly a hundred listed companies, making clear loan commitments to 32 listed companies, covering multiple industries including integrated circuits, transportation, high-end manufacturing, and business services.
Caixin reported on October 21st (Reporter Gao Ping) After the policy on stock repurchase, shareholding, and reloaning was introduced, many banks quickly implemented it. As of now, including industrial and commercial bank of china, bank of china, china construction bank corporation, cm bank, china citic bank corporation, and many other banks announced landing the first batch of stock repurchase, shareholding, and reloaning businesses today. Among them, some major banks have stated that they have reached cooperation intentions with nearly a hundred listed companies.
Industry insiders told Caixin reporters that stock repurchase, shareholding, and reloaning can to a certain extent improve the liquidity of corporate funds, funds may gradually enter the capital markets in an orderly manner, help inject liquidity into the market, and stabilize market expectations.
First batch of multiple banks' stock repurchase, shareholding, and loan business landed.
Since October 18th, after the announcement by the central bank officially introducing the stock repurchase, shareholding, and reloaning, 21 national financial institutions have started to swiftly implement the policy, allowing commercial banks to land quickly.
Specifically, recently, the Beijing branch of the industrial and commercial bank of china successfully processed a dedicated 0.1 billion yuan stock repurchase loan for gigadevice semiconductor inc. This loan is one of the first batch of publicly announced special stock repurchase loans after the release of the notice regarding the establishment of stock repurchase, shareholding, and reloaning matters. It is understood that after the policy for stock repurchase, shareholding, and reloaning was introduced, the Beijing branch of the industrial and commercial bank of china researched and formulated a plan for the landing of the special shareholding, and reloaning service. At the same time, focusing on key listed companies in Beijing, they carried out marketing activities to meet customer financing needs.
Similarly, today bank of china stated that they swiftly researched and formulated management requirements for stock repurchase, shareholding, and loan, quickly supported the landing of first-issue projects, and on October 19th, signed stock repurchase, shareholding, and loan agreements with china petroleum & chemical corporation, cosco ship engy, cosco shipping holdings, cosco shipping specialized carriers, cosco shipping development, and dongxin shares along with 6 listed companies; as of October 20th, in the first 23 cooperation landing announcements issued by the Shanghai Stock Exchange and Shenzhen Stock Exchange, bank of china supported 7 projects.
As of now, bank of china has reached cooperation intentions with nearly a hundred listed companies, making clear loan commitments to 32 listed companies, covering multiple industries including integrated circuits, transportation, high-end manufacturing, and business services.
In addition, according to Caixin reporters, as of now, China Construction Bank has reached cooperation agreements with GRG Metrology, Linglong Tire, Luennot Glass and other listed companies, with funds covering share buybacks and increases in holdings, involving both state-owned and private enterprises, with interest rates not exceeding 2.25%, providing low-cost incremental funding support to listed companies and major shareholders.
Among stock banks, as reported by Caixin, after the State Council Information Office press conference on September 24, Industrial and Commercial Bank of China held internal discussions and issued business guidance to the entire bank. Within a week, over 90 billion yuan in share buyback and repurchase financing needs were reached. After relevant regulatory agencies issued business notices, the first batch of customer loans were executed. Among the first group of clients for stock buyback and repurchase loans, there are both listed companies repurchasing loans and major shareholders of listed companies increasing loans. The clients include central state-owned enterprises, as well as high-quality private enterprises, including but not limited to China Merchants Port Group (001872.SZ), China Merchants Shekou (001979.SZ), China Merchants Energy Shipping (601872.SH), and more.
Additionally, it was reported by Caixin that on October 20, China CITIC Bank reached cooperation with Muyuan Foods, Suzhou Maxwell Technologies, and Zhejiang Jiahua Energy Chemical Industry, successfully implementing the first batch of stock repurchase and increased holdings refinancing business in the market.
Ensure that loan funds are 'specialized and dedicated, sealed operation,' strictly guard against crediting funds flowing into the stock market irregularly without meeting the conditions.
Shareholding and buyback refinancing loans are policy tools jointly established by the People's Bank of China, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission to support the management of market value of listed companies. The central bank, by issuing low-interest refinancing loans, aims to directionally reduce the cost of funds at the bank end, guiding commercial banks and other financial institutions to provide efficient and low-cost financial support for qualified high-quality listed companies and major shareholders, helping listed companies manage market value effectively, boost market confidence.
It is understood that refinancing tools involve multiple aspects such as stock buybacks, bank loans, and the People's Bank of China issuing refinancing loans. The central bank announcement emphasizes that the loan funds from 21 financial institutions should be specifically used for share buybacks and increases in holdings, ensuring 'specialized and dedicated, sealed operation.' Specifically, listed companies and major shareholders applying for loans should open separate dedicated securities accounts; financial institutions should open special bank loan accounts corresponding to the aforementioned dedicated securities accounts, supervising listed companies and major shareholders to ensure that the transferred funds are used for share buybacks and increases in holdings.
Bank of China stated that it will provide strong financial support for establishing a long-term effective mechanism to enhance the intrinsic stability of the capital markets, while thoroughly implementing regulatory policies and requirements, strictly maintaining the bottom line of risk and compliance, preventing credit funds that do not meet the conditions of the shareholding and buyback refinancing loan policies from irregularly flowing into the stock market. By strengthening risk control measures, it ensures that the share buyback and holding loan business is carried out in compliance, supporting the stable operation of the capital markets, and fully supporting listed companies in 'growing bigger and stronger.'
Looking ahead, China Construction Bank also expressed that it will continue to do well in subsequent loan disbursements, strengthen supervision and management of loan funds to ensure specialty and dedication of loan funds. It will actively communicate and cooperate with listed companies and major shareholders, understanding their financing needs and buyback holding plans, providing more precise and efficient financial services.
Haitong Int'l analyst Zhou Qi believes that regulatory requirements will strictly manage the loan funds of 21 financial institutions, implement various specific measures to ensure "special-purpose funds are for specific use, and operate in a closed manner". If violations occur, there will be certain consequences, and the People's Bank of China may, depending on the severity of the situation, take measures such as reclaiming and re-lending funds, and canceling qualifications for participating in structural monetary policy tools. Different regulatory authorities have information communication and linkage mechanisms, and listed companies will gradually fulfill disclosure obligations according to procedures. It is expected that the recent loans used for buybacks may exceed those used for increasing stakes.
