MNI China Daily Summary: Thursday, March 3

LIQUIDITY: The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.10% on Thursday. The operation has led to a net drain of CNY190 billion after offsetting the maturity of CNY200 billion repos today, according to Wind Information. The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.9738% from the close of 2.0078% on Wednesday, Wind Information showed. The overnight repo average fell to 1.7374% from the previous 1.8641%.

YUAN: The currency weakened to 6.3184 against the dollar from 6.3107 on Wednesday. The PBOC set the dollar-yuan central parity rate lower at 6.3016, compared with 6.3351 set on Wednesday.

BONDS: The yield on the 10-year China Government Bond was last at 2.8400%, up from 2.8225% of Wednesday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.09% to 3,481.11, while the CSI300 fell 0.59% to 4,551.63. The Hong Kong's Hang Seng Index edged up 0.55% to 22,467.34.

FROM THE PRESS: Many European and American family offices are increasing their holdings of A shares, taking yuan assets as an important safe-haven investment tool, the 21st Century Business Herald reported citing analysts. The low valuation of A shares, along with China’s stable economic fundamentals, strong yuan and loose monetary policy amid the Russia-Ukraine conflict are attracting more global investors, the newspaper said citing unnamed sources. The proportion of yuan assets invested by many family offices in Europe and the U.S. is only 3-4%, which may rise to 8-10% with the risk-averse nature of yuan assets increasing, the newspaper said.

China should pay close attention to the pressure of rising material costs in the manufacturing industry and insufficient consumption amid soaring global commodity prices, said the 21st Century Business Herald in an editorial. It is however capable of ensuring food and energy security, the newspaper said. Global oil and gas prices may continue to rise after setting new records if geopolitical risks persist, as global crude oil inventories are already at very low levels and supply capacity is limited, the newspaper said. The risk of global recession will increase as major economies may encounter stagflation, the newspaper said.

The housing market is likely to see a significant rebound in March and April, especially in first- and second-tier cities amid looser housing regulations to boost home sales, the Securities Daily reported citing Zhang Dawei, chief Analyst of Centaline Property. Nearly 50 cities across the country have released different degrees of easing policies, with 15 cities lowering down payment ratio, the newspaper said. Lowering down payment is a substantive relaxation to stimulate the market in third- and fourth-tier cities, and bigger cities may follow, the newspaper said citing Yan Yuejin, director of E-house China Research and Development Institution.