MNI China Daily Summary: Monday, May 7

     TOPS NEWS: China's currency rose to the highest level since April 2016, on

a trade-weighted basis against the currencies of its major trading partners,

according to weekly data released by the PBOC. The CFETS Weekly RMB Index, which

measures the yuan relative to a basket of 24 currencies, increased 0.15% from

last week to 97.52. As of May 4, the RMB gauge has recorded a 2.81% gain

year-to-date, up from 94.85 on Dec 29, according to MNI's calculations.

     LIQUIDITY: The PBOC skipped OMO on Monday, stating that the current

liquidity condition is at a "relatively high" level which can absorb the impact

of reserves payments. This resulted in unchanged liquidity conditions as no

reverse repos matured today. A total of CNY270 billion in reverse repos will

mature this week. CFETS-ICAP's money-market sentiment index closed at 33 on

Friday, down from 35 on Thursday.

     MONEY MARKET RATES: 7-day repo average dropped 2.6915% from the 2.7047% on

Friday, after PBOC left liquidity unchanged. The overnight repo average

decreased to 2.5611% from 2.5282% on Friday.

     YUAN: The yuan fell against the U.S. dollar after PBOC set a weaker daily

fixing. The yuan fell to 6.3639 against the U.S. unit, compared with the

official closing price of 6.3589 Friday. The People's Bank of China set the yuan

central parity rate at 6.3584 Monday, weaker than last Friday's 6.3521. 

     BONDS: The yield on benchmark 10-year China Government Bond was last at

3.6300%, higher than the previous close of 3.6250%, according to Wind

Information.

     STOCKS: Shares rose in Shanghai, led higher by liquor companies on investor

optimism on the sector, with Kweichow Moutai Co., Ltd. up more than 5%. The

benchmark Shanghai Composite Index closed up 1.48% at 3,136.64. Hong Kong's Hang

Seng Index declined 0.09% to 29,898.16. 

     FROM THE PRESS: The Ministry of Commerce and other relevant departments

have been actively researching ways to increase imports, reported Economic

Information Daily. A series of measures to increase imports will likely be

released soon, the report said. Aside from a tariff cut for the auto industry,

the food, medicine and medical instruments industries will likely also see

tariff cuts, the report said.

     Land sales in terms of value in seven cities, including Hangzhou, Ningbo

and Guangzhou, came in above CNY10 billion, with official data indicating the

highest April levels in history, reported China Securities Journal. Hangzhou in

particular recorded land sales of CNY17.9 billion, 237% higher than April last

year, the report said. However, Beijing did not increase its land supplies in

April, and the government only sold one piece of land at the price of CNY3.3

billion, the report said. Shanghai also recorded a lower land sale of CNY5.5

billion, 31.95% lower than that in March, the report said.

     As bond financing has become the main financing method for property

developers, more of them have turned to the offshore bond market to seek

funding, reported Economic Information Daily. The first four months in 2018 saw

the total bond financing for property developers in overseas markets amounting

to USD23.3 billion, much higher than USD11.2 billion during the same period last

year, the report said, citing data from Centaline Group, a Hong Kong-based

real-estate agent company. As domestic funding channels have been controlled and

property sales have been slowed, funding demands for property developers will

continue to increase, the report said, citing Zhang Dawei, chief analyst at

Centaline Group.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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