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TOP NEWS: China should not pursue an excessively high economic growth rate
in 2018, but rather set a target of about 6.5% GDP growth, Zhu Baoliang, chief
economist for the State information Center, an agency run by the State Council,
said in an interview published Monday by the Financial News, a journal run by
the People's Bank of China. In addition, Zhu said, the consumer price index
should be controlled within a level of growth of 3%, while growth in the M2
money supply should be maintained at around 10% in 2018. He also said growth in
total social financing should be around 12%. Zhu added that infrastructural and
property investment are expected to fall over the coming year while the
manufacturing sector is not expected to see a big rise. (Financial News)
LIQUIDITY: The People's Bank of China injected CNY80 billion in seven-day
reverse repos, CNY70 billion in 14-day reverse repos and CNY30 billion in 63-day
reverse repos via open-market operations. This resulted in a net injection of
CNY150 billion for the day, as a total of CNY30 billion in reverse repos matured
on Monday. A total of CNY66.5 billion in Medium-term Lending Facility (MLF)
loans also matured on Monday. Taking account of maturing MLF loans, the PBOC
injected a net of CNY83.5 billion into the banking system on Monday. A total of
CNY340 billion in reverse repos will mature this week. An additional CNY122.5
billion in MLF loans will mature Thursday, while CNY80 billion in treasury
deposits will mature Friday.
RATES: Money market rates were mixed. The seven-day repo average was last
at 2.9335%, lower than Friday's average of 2.9438%. The overnight repo average
was at 2.8155%, higher than Friday's 2.7379%.
YUAN: China's weekly Renminbi Index versus 24 trade-weighted currencies was
published Monday by the China Foreign Exchange Trading System -- the central
bank unit that runs the country's interbank market. The index was down 0.3% to
95.05 last week after a 0.34% rise the previous week. As of Nov. 10, the yuan
had appreciated 0.23% against the 24-currency basket since Dec. 30, according to
YUAN: The yuan fell against the U.S. dollar after the People's Bank of
China set a weaker daily fixing. The yuan was last at 6.6446 against the U.S.
unit, compared with the official closing price of 6.6400 on Friday. The PBOC set
the yuan central parity rate against the U.S. dollar at 6.6347 on Monday, weaker
than Friday's 6.6282.
BONDS: The yield on benchmark 10-year China government bonds was last at
3.9800%, up from the previous close of 3.9200%, according to Wind, a financial
STOCKS: Stocks moved higher, led up by the steel sector. The benchmark
Shanghai Composite Index closed up 0.44% at 3,447.84. Hong Kong's Hang Seng
Index was 0.35% higher at 29,222.03.
FROM THE PRESS: Banks' entrusted investment businesses are expected to
rebound in the period ahead as the correction in the bond market approaches an
end, the Financial News, a journal run by the People's Bank of China, reported
Monday. Since September, bond entrusted investment funds have seen healthy
growth compared with the sluggish performance in previous months this year,
particularly the public offerings of funds backed by banks, the report said. The
increase is partially due to some funds trying to expand business at the end of
year. In the past year, banks cut back their entrusted investment businesses
under pressure from stricter regulation and a weak bond market, the report
noted, adding that some small- and medium-sized banks even suspended their
entrusted investment businesses. (Financial News)
China needs to prevent potential risks from financial technology
innovations (fintech) given uncertainties about the impact on liquidity, credit
and financial system operations, the Financial News, a journal run by the
People's Bank of China, said in a commentary Monday. Advantages from new
developments in data and technology are causing banks, securities firms and
insurance companies to merge fintech into traditional transaction activities at
a rapid pace, the commentary said. But potential risks have been accumulating
and could spill over to the financial system as a whole, the commentary warned.
There are challenges ahead in optimizing the construction of fintech
infrastructure, improving regulation, building up a relevant legal system as
well as protecting consumer's rights and interests, the commentary said.
Investors need to be cautious about a potential price drop of convertible
bonds, as their issuance has been expanding at a rapid pace, the Securities
Daily reported Monday. Given issuers have rights to reduce prices when bonds are
converted into stock, investors could have great difficulty selling stocks at a
profit, the report said, citing people with knowledge of the situation.
Investors should be concerned about a price fall in these bonds, particularly
those with ratings that have been withdrawn, the report warned. (Securities
China e-commerce platforms set a new sales record during Sunday's Single's
Day online shopping festival, the Shanghai Securities News reported Monday.
Alibaba Group took in a total CNY168.2 billion via its online e-commerce
platform, Tianmao.com, within the 24 hours, compared with the previous record of
CNY120.7 billion last year, with the value of sales exceeded CNY10 billion three
minutes after the midnight start of the world's largest sales event. Meanwhile,
fellow on-line shopping giant JD.com took in CNY127.1 billion, a 50% increase
compared with Single's Day in 2016, the report said. Updated consumption
capacity and strong consumer sentiment have opened a new era for retail
e-commerce, the report noted. (Shanghai Securities News)
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