SHANGHAI, Oct 21 Reuters More than 20 Chinese listed companies have announced plans to tap special central bank lending for share purchases, according to exchange filings, days after the People39;s Bank of China PBOC kicked off the 42 billion funding scheme.

The PBOC launched the relending programme on Friday, allowing listed companies or their major shareholders to borrow cheaply to fund share buybacks or holding increases. The scheme is worth 300 billion yuan 42.24 billion initially.

Companies including oil giant China Petroleum and Chemical Corp Sinopec port operator China Merchants Port Group said in filings over the weekend that they had secured special loans from banks for share buybacks or purchases.

Analysts expect more firms to follow suit, injecting fresh cash into the stock market and adding fuel to a rally that appears to be losing steam.

Under the scheme, listed companies and their major shareholders can obtain loans at interest rates of up to 2.25, which could be enticing for companies with higher dividend ratios or net profit margins, said Wang Mengying, analyst at Nanhua Futures.

If I39;m a business owner … I have incentive to buy back shares if the cost of equity financing is higher than 2.25, Wang said.

Similarly, companies with net profit margins exceeding that level could also be willing to buy back shares, she said, predicting bluechip companies would be more likely to participate in the scheme.

Sinopec said in a statement that its…