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Free AccessMNI China Daily Summary: Friday, July 8
POLICY: Chinese property developers are eager to move units with some even resorting to unusual sales tactics to partially accept grain and fruit as they face a debt repayment peak in the second half of the year, but any obvious rebound may not come until the end of the third quarter, according to analysts. Developers will see over CNY310.2 billion of maturing bonds in H2, with July alone near a quarter of that amount at CNY83 billion of maturities, data by China Real Estate Information Corp showed.
LIQUIDITY: The People's Bank of China (PBOC) injected CNY3 billion via 7-day reverse repos with the rate unchanged at 2.10%. The operation has led to a net drain of CNY7 billion after offsetting the maturity of CNY10 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 1.5542% from the 1.5643% on Thursday, Wind Information showed. The overnight repo average rose to 1.2130% from the previous 1.2126%.
YUAN: The currency strengthened to 6.7051 against the dollar from 6.7073 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.7098, compared with 6.7143 set on Thursday.
BONDS: The yield on 10-year China Government Bond was last at 2.8360%, down from Thursday's close of 2.8375%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged down 0.25% to 3,356.08 while the CSI300 index fell 0.33% to 4,428.78. Hang Seng Index rose 0.38% to 21,725.78.
FROM THE PRESS: China's economy is recovering but the foundation is not solid and arduous efforts will be required, said Premier Li Keqiang during a Thursday meeting with officials from five coastal regions, Xinhua News Agency reported. The five coastal powerhouses, including Shanghai, Jiangsu, Zhejiang, Fujian and Guangdong, account for over one third of the nation’s economy and nearly 40% of the country’s overall fiscal income. They need to continue shouldering the responsibility of helping the economy grow and ensuring China’s fiscal strength, Li was cited as saying. These areas should work hard to stabilise employment as they provide jobs for about 70% of China’s migrant workers, Xinhua said citing Li.
China's foreign exchange reserves declined by USD56.5 billion on month to USD3.07 trillion by end-June, as the U.S. dollar index rose sharply and global asset prices fell, Securities Times reported citing Wang Chunying, deputy head of the State Administration of Foreign Exchange. A 2.9% appreciation of the dollar index in June may have bitten USD30 billion of China’s non-dollar-denominated assets, while the decline in equity assets may exceed USD10 billion amid falling bond and stock markets globally, the newspaper said citing Wen Bin, chief economist of Minsheng Bank. FX reserves will likely keep fluctuating slightly in July, as major central banks continue to hike rates, the newspaper said citing Zheng Houcheng, director of Yingda Securities Research Institute.
China has rolled out detailed measures to boost automobile purchases, including promoting the use of electric cars, activating the second-hand car market, and supporting parallel car imports, the Securities Daily reported citing a document jointly released by 17 departments. Advisors suggest China can reduce the down payment ratio for car purchases, or implement zero down payment for the purchase of electric vehicles, as well as lower car loan interest rates and extend the repayment period, the newspaper said.
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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.