MNI China Daily Summary: Friday, February 23

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY247 billion via 7-day reverse repo on Friday, with the rates unchanged at 1.80%. The reverse repo operation has led to a net injection of CNY155 billion reverse repos after offsetting CNY92 billion maturity today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8425% from 1.8242% on Thursday, Wind Information showed. The overnight repo average increased to 1.7404% from the previous 1.6310%.

YUAN: The currency weakened to 7.1984 versus 7.1859 from Thursday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1064, compared with 7.1018 set on Thursday.

BONDS: The yield on 10-year China Government Bonds was last at 2.4450%, down from Thursday's close of 2.4475%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.55% to 3,004.88, while the CSI300 index was up 0.09% to 3,489.74. The Hang Seng Index was down 0.10% to 16,725.86.

FROM THE PRESS: Authorities will set a relatively high target of about 5% GDP growth for 2024 to improve confidence and avoid weakening expectations, according to Huang Wentao, chief economist at CITIC Securities. However, China will likely achieve 4.8% growth this year as the economy bottoms out, according to Mao Zhenhua, chief economist at China Chengxin International. Zhang Wenkui, deputy director at the Development Research Center of the State Council believes the target achievable should officials implement proactive policies to expand demand. (Source: Yicai)

The Shanghai and Shenzhen stock exchanges recently took action to regulate abnormal trading behaviour but did not restrict normal sales, according to a spokesperson from the China Securities Regulatory Commission at a recent press conference. When asked about media reports of restrictions on net selling, the spokesperson said regulatory authorities did not interfere with normal market transactions and protected investors' rights to fair and free transactions in accordance with the law. (Source: Yicai)

Chinese car buyers are expected to maintain a wait-and-see approach amid a new round of price competition between sellers, which was not conducive to releasing demand, according to the China Passenger Car Association. Data showed car sales in February hit 1.15 million units, down 43.5% m/m, as the spring festival impacted buying. Additionally, buyers concerns about battery life had increased due to recent cold weather and led to suppressed sales of NEVs. The association expects February to mark the yearly low point for car sales in 2024. (Source: Yicai)