MNI China Daily Summary: Friday, December 1

DATA: China's Caixin manufacturing PMI rose by 1.2 points to register 50.7 in November from October, rising back to the expansionary zone above the breakeven 50 mark and hitting a three-month high, the financial publisher said.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY119 billion via 7-day reverse repo, with the rate unchanged at 1.80%. The operation has led to a net drain of CNY545 billion after offsetting the maturity of CNY664 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.7966% from 2.1753% on Thursday, Wind Information showed. The overnight repo average fell to 1.6061% from the previous 1.8679%.

YUAN: The currency weakened to 7.1400 against the dollar from 7.1310 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.1104, compared with 7.1018 set on Thursday. The fixing was estimated at 7.1436 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bond was last at 2.6950%, down from Thursday's close of 2.6975%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.07% to 3,031.64 while the CSI300 index edged down 0.38% to 3,482.88. Hang Seng Index lost 1.25% to 16,830.30.

FROM THE PRESS: China's manufacturers face insufficient market demand according to Zhao Qinghe, a senior statistician at the Service Industry Survey Center of the National Bureau of Statistics. Zhao noted 60% of respondents in the PMI survey said demand remained low. Zhang Liqun, analyst at the China Logistics Information Center believed the PMI result showed policymakers still needed to strengthen the momentum of the recovery and the government should use proactive fiscal policies to increase orders and promote investment. (Source: Yicai)

The Dalian Commodity Exchange (DCE) will strengthen market supervision and crack down on illegal trading in key products such as iron ore futures, according to a statement on the DCE website. In response to large fluctuations in iron-ore futures, the exchange will continue to watch for violations such as spreading incorrect information and making false hedging transactions. The DCE this year has imposed multiple penalties on illegal traders, including fines and market bans.

Zheshang Bank, China Construction Bank, Bank of Communications and others have successively held meetings with major real-estate companies to understand better their financing needs, fueling market expectations of a fresh round of support policies, Yicai.com reported. Authorities have not issued an official "white list" or ordered banks to increase their proportion of real-estate loans, the newspaper said citing an unnamed source from a local branch of a major state-owned bank. However, market discussion has centered on banks being required to match their real-estate loan growth with the industry average, while the growth of lending to private developers, including corporate loans and mortgages, should not fall lower than overall lending growth to the sector.