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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI China Daily Summary: Friday, August 11
EXCLUSIVE: The People’s Bank of China (PBOC) will boost liquidity by measures including possibly cutting reserve requirement ratios or policy rates in order to facilitate increased local government debt issuance while additional stimulus to boost a flagging economy is likely to be announced after this month’s key government meeting at Beidaihe, policy advisors told MNI.
POLICY: China’s new loans and aggregate finance dipped more than expected in July, with M2 continuing to decelerate on a higher base comparison and weaker credit demand, the People's Bank of China data released showed.
LIQUIDITY: The PBOC conducted CNY2 billion via 7-day reverse repos with the rate unchanged at 1.90%. The operation has led no change to the liquidity after offsetting the maturity of CNY2 billion reverse repo today, according to Wind Information. The operation aims to keep banking system liquidity reasonable and ample, the PBOC said on its website.
RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.7636% from 1.7309%, Wind Information showed. The overnight repo average increased to 1.3322% from the previous 1.3310%.
YUAN: The currency weakened to 7.2340 against the dollar from 7.2072 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.1587, compared with 7.1576 set on Thursday. The fixing was estimated at 7.2078 by BBG survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.6805%, down from 2.6836% at Thursday's close, according to Wind Information.
STOCKS: The Shanghai Composite Index edged down 2.01% to 3,189.25 while the CSI300 index fell 2.30% to 3,884.25. The Hang Seng Index was down 0.90% to 19,075.19.
FROM THE PRESS: China will need 4.5% y/y growth in the H2 to achieve its 5% y/y growth target, which depends on whether policies can boost real estate while offsetting export decline, said Luo Zhiheng, chief economist at Yuekai Securities. Though the y/y growth in Q2 accelerated to 6.3% from Q1’s 4.5%, the two-year average growth excluding the base effect decelerated to 3.3% from Q1’s 4.6%, indicating a slower recovery. H2's two-year average growth will need to reach 3.95% to meet the target. Luo noted authorities must ensure policy stability, fulfill promises made by local governments, improve anti-monopoly and competition laws to boost the confidence of private companies. (Source: 21st Century Business Herald)
Country Garden is preparing to restructure its debt soon, Yicai understands. The developer has hired China International Capital Corporation to assist the restructure and recently released a statement saying it will maintain communication with creditors and take various debt management measures to ensure the long-term development. Insiders believe Country Garden can overcome current difficulties given its low leverage. (Source: Yicai)
The Shanghai Stock Exchange (SSE) will introduce post-market fixed price trading for ETFs to meet demands of investors and reduce the impact of passive tracking. To increase market vitality, the SSE said investors will have lower costs from reducing integer quantities of stocks on its main board from 100 to 1. The exchange plans to release English versions of transaction and business rules and seek to implement global best practices. (Source: 21st Century Business Herald)
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.