MNI China Daily Summary: Friday, November 5

EXCLUSIVE: Chinese property developers are scrambling to regain investor confidence in the wake of the Evergrande scare, but further defaults may be inevitable as tens of billions of dollars in debt come due over the next year and authorities insist on longer-term plans to reduce leverage in property sector, policy advisors and industrial experts told MNI.

LIQUIDITY: The People's Bank of China (PBOC) injected CNY100 billion via 7-day reverse repos with the rates unchanged at 2.2%. The operation led to a net drain of CNY100 billion after offsetting the maturity of CNY200 billion reverse 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) edged rose to 2.1240% from the close of 2.1129% on Thursday, Wind Information showed. The overnight repo average increased to 1.8932% from the previous 1.8881%.

YUAN: The currency weakened to 6.4013 against the dollar from 6.3956 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 6.3980, compared with the 6.3980 set on Thursday.

BONDS: The yield on the 10-year China Government Bond was last at 2.9150%, down from Thursday's close at 2.9450%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 1.00% to 3,491.57, while the CSI300 lost 0.54% to 4,842.35. Hong Kong Hang Seng Index tumbled 1.41% to 24,870.51.

FROM THE PRESS: China's growth rate of aggregate finance is expected to bottom out, with analysts expecting aggregate finance to increase by over CNY1.6 trillion in October, due to the accelerated release of loans for developers and home buyers as well as high level of government bond issuance, the Securities Times reported citing analysts. Real estate financing has become an important factor constraining the rebound in aggregate finance given to less property loans, declining developers' bond sales and sharply falling trust funds to the sector, the newspaper said. Though the financing environment for developers has relaxed, credit growth in the sector will still lag the overall credit growth as the cooling housing market is discouraging mortgage loans, the Times said citing Wang Qing, chief analyst at Golden Credit Rating.

China's Kaisa Group Holdings became the country's latest major real estate company mired in debt crisis after missing payments on a wealth management product it sold, Yicai.com reported. On Thursday, the company and about 500 investors failed to reach an agreement after hours of meeting in Shenzhen, said the news site. The WMP, issued by Kaisa Finance, a unit of the property group, is worth CNY12.7 billion, the newspaper said. Kaisa Group must still repay approximately USD3.2 billion in the next 12 months, USD400 million due on Dec. 7, the newspaper said citing data by S&P Global Ratings.

China will not allow global chipmakers to violate Chinese laws and regulations, whether forced or not, which may put Chinese technology companies at risk, the Global Times said in an editorial in response to reports that South Korean chipmakers may be the latest yielding to U.S. requests for sensitive business for boosting supply-chain transparency, which the government-run newspaper said is a disguise. U.S. access to sensitive data, which may seriously harm the interests of Chinese semiconductor-related industries, is a red flag for relevant firms to become more vigilant, the newspaper warned. China is the largest semiconductor market with significant chip application manufacturing capacity, so China should use its large size and manufacturing strength to gain more strategic initiative in the semiconductor supply chain by better organizing and coordinating downstream markets and manufacturing activities, the newspaper said.