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Shares rise on PBOC's intention to ease policy

2014-12-30 08:38 Shanghai Daily Web Editor: Qin Dexing

Shanghai stocks yesterday rose to the highest level since January 2010 after the People's Bank of China was reported to further ease its monetary policy to bolster economic growth over the weekend.

The Shanghai Composite Index added 0.33 percent, or 10.42 points, to 3,168.02 points.

From January 1, the PBOC will include savings held by lenders for non-deposit-taking financial institutions into bank deposits from 2015, the Xinhua news agency reported.

The PBOC will temporarily waive the reserve requirement for such deposits and will help lower banks' loan-to-deposit ratio to encourage them to release more money to the market to ease liquidity pressure. The measures are seen as another move to replace a universal reserve-requirement ratio cut.

Haitong Securities said in a statement that the loan-to-deposit ratio of commercial banks will fall by 5 percent on average, releasing around 5.5 trillion yuan (US$884 billion) to the economy.

Guotai Junan Securities said the state-owned enterprises and the infrastructure construction sector are set to benefit from bank loans as these sectors offer stable growth.

Property developers jumped on the prospect of a bigger supply of funds for borrowing. Poly Real Estate Group and Beijing Capital Development surged by the daily limit of 10 percent.

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