Impact from index futures contracts seen to be muted
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The Shanghai stock market is likely to rebound this week following the Lunar New Year holiday, market watchers said.
The benchmark Shanghai Composite Index climbed 2.70 percent in the week ended February 12, the biggest weekly gain this year, to close at 3,018.13 as investors had less concerns about inflation.
The China Securities Regulatory Commission gave approval for the first stock index futures contract in the country on Saturday and the China Financial Futures Exchange will accept applications to open accounts from investors from today.
The index futures contracts will be based on the CSI300 index that tracks the top 300 Chinese mainland-listed companies.
"The launching of the stock index futures will not have a large impact on the stock market as investors have been prepared for the official announcement for a long time," Shenyin & Wanguo Securities wrote in a research note.
Yang Jianxin, a Nanjing Securities' analyst, said the key index "is very likely to close higher in the first (trading) week after the holiday break" as it had been fluctuating around 3,000 points for several days before the holiday.
The People's Bank of China, the central bank, said before the holiday break that it will raise the bank reserve ratio to 16.5 percent on Thursday, the second rise this year.
Essence Securities wrote on Saturday the PBOC will continue to withdraw liquidity and it is possible the reserve ratio will be raised again in the next two months.
The PBOC said in a statement on its Website on Saturday that lenders should not "over-grant" loans to companies and must calculate their real demand.
Banks will also be barred from issuing personal loans without identifying the intended use and they must have a face-to-face meeting with the borrowers before approving the credit, the statement said.
Banks lent 1.39 trillion yuan (US$203.54 billion) of new loans in January, 19 percent of this year's 7.5 trillion yuan target.
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