PBOC con­tin­ues liq­uid­ity in­jec­tion

China Daily European Weekly - - Business - Cross-border M&As set to gather mo­men­tum

China’s cen­tral bank con­tin­ued net cash in­jec­tions into the money mar­ket on Oct 31 to ease liq­uid­ity strain. The Peo­ple’s Bank of China con­ducted 300 bil­lion yuan ($45.2 bil­lion; 38.8 bil­lion eu­ros; £34 bil­lion) of re­verse re­pos, pump­ing a net 80 bil­lion yuan into the mar­ket as 220 bil­lion yuan of re­verse re­pos ma­tured. Re­verse repo is a process by which the cen­tral bank pur­chases se­cu­ri­ties from com­mer­cial banks through bid­ding with an agree­ment to sell them back in the fu­ture. This week’s op­er­a­tion came after a net in­jec­tion of 40 bil­lion yuan on Oct 30, 90 bil­lion yuan on Oct 29 and 20 bil­lion yuan on Oct 28, as ma­tur­ing re­verse re­pos and tax pay­ments put pres­sure on liq­uid­ity near the end of the month. Cross-border merg­ers and ac­qui­si­tions are ex­pected to pick up de­spite cur­rent slug­gish turnover, with China and the United States be­ing the driv­ing forces, an in­dus­try re­port said. Ac­cord­ing to the re­port by Brunswick Group, a global pub­lic re­la­tions com­pany, 58 per­cent of the in­ter­vie­wees, among the more than 100 pro­fes­sion­als in­ter­viewed, an­tic­i­pated an in­crease in the num­ber of cross-border deals in the next 12 months, while 31 per­cent of them ex­pected it to be the same as last year. More than 70 per­cent of in­ter­vie­wees be­lieved that China and the US will be the most ac­tive coun­tries driv­ing out­bound ac­qui­si­tions, with Europe in third place. Currently, global cross-border merg­ers and ac­qui­si­tions are ex­pe­ri­enc­ing a de­pres­sion. Data from fi­nan­cial mar­kets plat­form Dia­logic showed that global cross-border merg­ers and ac­qui­si­tions de­clined by 7 per­cent

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