MNI China Daily Summary: Friday, September 9

DATA: China's M2 money supply growth quickened to 12.2% y/y in August from 12% in July, meeting market forecasts. It was the fastest growth since April 2016, People's Bank of China (PBOC) data showed. New loans more than doubled to CNY1.25 trillion from July's CNY679 billion, but fell short of a forecast for CNY1.5 trillion. Aggregate financing more than tripled to CNY2.43 trillion, up from the previous 6-year-low of CNY756.1 billion and beating expectations for a print of CNY2 trillion.

DATA: China's August consumer price index rose 2.5% y/y, decelerating from July's 2.7% and falling short of the median forecast for a 2.8% print, data from the National Bureau of Statistics showed. The producer price index eased for the tenth straight month to 2.3% y/y from July's 4.2%, following declines in crude oil and non-ferrous metals prices, as well as weak domestic demand. The figure was much lower than the 3.2% forecast, and hit the lowest level since February 2021.

LIQUIDITY: The PBOC injected CNY2 billion via 7-day reverse repos with the rate unchanged at 2.0% on Friday. This keeps the liquidity unchanged after offsetting the maturity of CNY2 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 1.4454% from 1.4538% on Thursday, Wind Information showed. The overnight repo average rose to 1.1702% from the previous 1.1589%.

YUAN: The currency strengthened to 6.9192 against the dollar from 6.9639 on Thursday. The PBOC set the dollar-yuan central parity rate lower at 6.9098, compared with 6.9148 set on Thursday.

BONDS: The yield on 10-year China Government Bond was last at 2.6425%, up from Thursday's close of 2.6300%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.82% to 3,262.05 while the CSI300 index gained 1.39% to 4,093.79. Hang Seng Index rallied 2.69% to 19,362.25.

FROM THE PRESS: Infrastructure investment may grow more than 10% y/y in Q3, supported by CNY600 billion of targeted funding from state-owned policy banks by the end of September, the Securities Times reported. Projects to be funded include the renovation of old communities, provincial highways and electric vehicle charging stations. Local governments are accelerating project construction, with Xinjiang having about 8,000 projects with an investment of more than CNY5 million each under construction in August.

Jinan City Development Group, a state-owned property developer in Shandong province, will buy 3,000 homes and use them for affordable rental housing to relieve pressure on local property developers and stabilise the housing market, Yicai.com reported. Since buyers started a mortgage boycott on unfinished projects in early July, localities have pushed to ensure delivery of unfinished projects through bailout funds and by promoting mergers and acquisitions by asset management companies. Large-scale home purchases by state-owned developers could bolster the market but that would require them to lower their criteria for property acquisitions, the newspaper said citing an unnamed insider.