PBOC Resumes Cash Injection After 5-Week Break as IPO's Arrive

 
By Shen Hong 
 

        SHANGHAI--China's central bank is pumping a modest amount of cash into the financial system this week, signaling an intention to boost supply of funds as a slew of new share offerings hit the country's stock markets.
        The People's Bank of China is set to inject a net 10 billion yuan (US$1.63 billion) into the banking system this week. It is offering CNY10 billion of 14-day repurchase agreements, a short-term loan to commercial lenders, in its open-market operation on Thursday, traders participating in the exercise told The Wall Street Journal.
        Prior to this, the central bank had left the money market untouched for five weeks in a row, as funds remained ample in the system.
        The PBOC offered CNY20 billion yuan of the same instrument in its open-market operation on Tuesday.
        A total of CNY40 billion yuan will return to the banking system this week due to the maturity of repos.
        The PBOC carries out regular open market operations Tuesdays and Thursdays.
        Traders said resumption of small fund injection this week is likely due to 11 initial public offerings slated for listings on both the Shanghai and Shenzhen stock exchanges over the next week.
        The first two IPOs will start taking orders from investors on Friday.
        The IPOs of the 11 companies are expected to attract around one trillion yuan of funds, according to estimates by some analysts.
        Write to Shen Hong at hong.shen@dowjones.com
        (END) Dow Jones Newswires

        November 19, 2014 20:51 ET (01:51 GMT)

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