MNI China Daily Summary: Friday, March 14
DATA: China's M2 money supply grew by 7.0% y/y in February, flat from January's growth and meeting market forecast, data released by the People's Bank of China (PBOC) showed. Banks extended CNY1.01 trillion in new loans in the first two months, down from January's seasonal boom of CNY5.13 trillion. Total social financing rose by CNY2.23 trillion, lower than growth of CNY7.06 trillion in January.
POLICY: Authorities have instructed all regions and colleges to accelerate job development and recruitment over the spring months, the Ministry of Education announced, as China aims to boost graduate employment.
POLICY: China’s rail freight dispatched 808 million tonnes during the first two months of the year, a y/y increase of 0.3%, the State Railway Administration said.
LIQUIDITY: The PBOC conducted CNY180.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY4.3 billion after offsetting the maturity of CNY185 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.8121% from 1.8004% previously, Wind Information showed. The overnight repo average increased to 1.8001% from the previous 1.7711%.
YUAN: The currency strengthened to 7.2288 against the dollar from the previous 7.2427. The PBOC set the dollar-yuan central parity rate higher at 7.1738, compared with 7.1728 set on Thursday. The fixing was estimated at 7.2449 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.8300%, flat from the previous close, according to Wind Information.
STOCKS: The Shanghai Composite Index rose 1.81% to 3,419.56, while the CSI300 index increased 2.43% to 4,006.56. The Hang Seng Index rallied 2.12% to 23,959.98.
FROM THE PRESS: China’s central bank should create structural tools to encourage financial institutions to issue consumer credit, expand household spending and facilitate investment and consumption balance, according to Wei Gejun, counsellor at the People's Bank of China, speaking at a recent PBOC meeting. China Galaxy Securities said the central bank may expand or create new structural tools to support technology, consumption and promote the property and stock markets. (Source: Yicai)
Shanghai Securities Exchange will support listing high-quality technology companies that have made breakthroughs in key areas, according to a statement on its website. The exchange will enhance refinancing, mergers and acquisitions, equity incentives, and share reductions, while also guiding private equity and venture capital funds to invest in hard tech and start-ups, the statement added.
Several Chinese banks have tightened rules on dollar wealth management products after quotas filled up, 21st Century Business Herald has reported. An insider at one institution said customers’ subscription amount for the day can no longer exceed the redemption amount from the previous day and the bank will not proactively promote foreign currency wealth management products. Last year, dollar wealth management products averaged over 5% return, with demand increasing after recent rate cuts on dollar deposits, the paper noted.