MNI China Daily Summary: Monday, Aug 26

MNI ((BEIJING)) - POLICY: China’s sluggish property market continued to drag down fiscal revenue as income from land sales saw their biggest decline in over a year, according to the Ministry of Finance.

LIQUIDITY: The PBOC conducted CNY471 billion via 7-day reverse repos and CNY300 billion via 1-year MLF, with the rate unchanged at 1.70% and 2.3% respectively. The operation led to a net injection of CNY418.9 billion after offsetting maturities of CNY52.1 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.9594% from 1.8475%, Wind Information showed. The overnight repo average increased to 1.8551% from 1.8144%.

YUAN: The currency strengthened to 7.1188 against the dollar from 7.1368 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.1139, compared with 7.1358 set on Friday. 

BONDS: The yield on 10-year China Government Bonds was last at 2.1000%, up from 2.0900% at Thursday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.04% to 2,855.52 while the CSI300 index decreased 0.09% to 3,324.22. The Hang Seng Index rose 1.06% to 17,798.73.

FROM THE PRESS: 

Guangdong saw fixed asset investment fall 1.9% y/y during January to July, but rose 5.7% when excluding a 16.9% drop in real-estate investment, the province’s statistics department has reported. Infrastructure investment increased 0.3%, while the industrial sector went up 14.0% with high-tech increasing 18.0%. Industrial enterprises' added value reached CNY2.3 trillion, up 5.7% y/y, with output of new energy vehicles, smart phones, integrated circuits, and industrial robots growing by 24.8%, 19.2%, 30.5%, and 32.0%. The province's total retail sales hit CNY2.73 trillion, a y/y increase of 1.0%.

China’s top securities watchdog has urged institutional investors to strengthen buyer power and help investors obtain reasonable returns to improve capital market confidence, Securities Times reported citing a recent meeting. The CSRC and major investors discussed deepening reforms to encourage long-term investment, including improvements to accounting, taxation and other incentive mechanisms. Investors proposed support for more tech firm listings and to guide public companies to increase dividends and buybacks, the newspaper said.

The yuan’s share of global payments reached 4.74% in July, a record high, ranking as the fourth most active world currency for the ninth consecutive month, Securities Daily reported citing data by Swift. The yuan’s share of trade financing reached 6%, second to the U.S. dollar and surpassing the euro for the second month. The currency's growth was due to increased trade volumes, stable economic fundamentals and the two-way opening of the country’s financial market, the newspaper said, citing Chao Zhen, researcher at Bank of China Hainan Financial Research Institute.