MNI China Daily Summary: Monday, March 10
MNI (BEIJING) - EXCLUSIVE: A new bond platform for Chinese tech companies is likely to boost issuance only modestly at first, but will grow over time, and aligns with People’s Bank of China objectives for building a multi-tiered market for debt securities and supporting key sectors, a senior government advisor told MNI.
EXCLUSIVE: Measures by China’s authorities to support the stock market and the broader economy should drive equity prices higher over the next two to three years, as domestic institutional investors pivot away from low-yielding bonds and from property markets and as overseas buyers reassess valuations of Chinese assets, a senior government advisor told MNI.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY96.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY0.5 billion after offsetting the maturity of CNY97 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.8149% from 1.8066%, Wind Information showed. The overnight repo average increased to 1.8059% from 1.7941%.
YUAN: The currency weakened to 7.2649 against the dollar from 7.2382 on Friday. The PBOC set the dollar-yuan central parity rate higher at 7.1733, compared with 7.1705 set on Friday. The fixing was estimated at 7.2408 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.7900%, up from the previous close of 1.7750%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index edged down 0.19% to 3,366.16 while the CSI300 index decreased 0.39% to 3,928.80. The Hang Seng Index fell 1.85% to 23,783.49.
FROM THE PRESS: Authorities will support labour-intensive industries to stabilise employment during periods of transformation and upgrading, said Wang Xiaoping, Minister of Human Resources and Social Security. Wang called for a balance between technological innovation and employment, and noted this year's 12.2 million college graduates and a large number of migrant workers required a stable job market. However, increasing external uncertainties and an unstable economic rebound could bring challenges, said Wang. (Source: Yicai.com)
China’s slowdown in export growth to 2.3% y/y during January and February could indicate the surge of previous months has declined, according to Yang Chang, chief analyst at Zhongtai Securities Research Institute. Zeng Gang, dean of the Institute of Urban Development at East China Normal University, said policymakers should focus on transitioning to high-quality trade given China's comparative advantage in low-cost manufacturing will be difficult to maintain, regardless of tariffs. Wang Qing, chief macro analyst at Orient Securities, highlighted the trade war will be offset by emerging external drivers, such as cross-border e-commerce and services exports. (Source: Yicai)
China’s consumer price index is expected to reach 0.3% y/y in March, up from February’s 0.7% fall, according to Feng Lin, director of research at Orient Jincheng, citing recent trends in high-frequency data and the current consumer market supply and demand balance. Looking ahead, Mingming, chief economist at CITIC Securities, said PPI y/y declines may narrow from February's 2.2% fall, as demand increases and ferrous industry prices gain momentum, however geopolitics brings uncertainty. (Source: Securities Daily)