(Yicai) Nov. 21 -- China’s new CNY300 billion (USD41.4 billion) re-lending facility to help listed firms and major shareholders to repurchase stock has quickly gained traction, with CNY35.2 billion (USD4.9 billion) borrowed in the first month.

Some 152 listed companies, over 60 percent of which are in the private sector, have tapped the facility so far, according to data from Wind Information. The figure includes 109 announcements for share buybacks and 43 for increases by major shareholders.

Yesterday alone, several listed companies, including China Resources Chemical Innovative Materials, Zanyu Technology, Tecon Biology, and AiSen Semiconductor Material, revealed plans to borrow from the facility.

“This new financial instrument is gaining rapid market acceptance, helping to stabilize share prices, boost market confidence, and promote the high-quality development of listed companies," Tian Lihui, dean of the Financial Development Research Institute at Nankai University, told Yicai.

The pace of borrowing from the facility is expected to quicken, Tian noted.

The People's Bank of China unveiled the new re-lending facility on Sept. 24, as part of a broader economic stimulus package. It was officially launched on Oct. 18, with the first group of 23 participants announced two days later.

Commercial banks can offer loans for stock repurchases at rates of up to 50 basis points higher than the facility's 1.75 percent benchmark, PBOC Governor Pan Gongsheng said at the September press briefing. The initiative is aimed at boosting stock prices, supporting liquidity, and boosting investor confidence, Pan said.

Removing shares from the market with buybacks benefits shareholders by earnings per share, Liu Jinjin, chief China equity strategist at Goldman Sachs, told Yicai. “We expect the total amount of repurchased shares to double next year compared with this year," he noted.

But Tian cautioned that stock buybacks and purchases by major shareholders do not guarantee that share prices will appreciate. Investors still need to evaluate the debt repayment capacity of these companies, he said.

Editors: Tang Shihua, Futura Costaglione