SHANGHAI (Reuters) - Eleven Chinese brokerages have committed 25.5 billion yuan ($3.70 billion) to a recently-announced asset management scheme that aims to eventually channel over 100 billion yuan into cash-strapped listed firms plagued by pledged share woes, an industry association said on Friday.
Separately, Galaxy Securities Co plans to join hands with state and private institutions to launch a 60-billion-yuan fund designed to ease liquidity stress at private firms, the official Securities Times reported.
The latest rescue measures came after Chinese President Xi Jinping on Thursday promised support for the private sector, which is suffering in a slowing economy.
They are also part of a government-orchestrated campaign to stem the stock market slide and ease margin call pressure on listed companies. About $620 billion worth of Chinese shares, or 10 percent of stock market capitalization, have been used as collateral against loans.
The Securities Association of China (SAC) said on Friday that the 11 brokerages signed agreements on Wednesday, promising to invest a combined 25.5 billion yuan in the scheme by November 30.
The brokerages, which SAC didn't identify, will then attract more capital from banks, insurers, state-owned enterprises and local governments. The money will be used to ease liquidity pressure at listed companies with good prospects, but experiencing temporary difficulties.
China has over the past weeks unveiled a raft of measures to support struggling private firms, urging brokerages not to liquidate pledged shares forcfully and encouraging public and private funds to aid companies that fail to meet margin calls.
Since Chinese senior officials voiced a chorus of support to struggling private firms on October 19, various types of investors have committed over 500 billion yuan to the relief campaign, Securities Times estimates.
($1 = 6.8903 Chinese yuan renminbi)