MNI China Daily Summary: Monday, November 4
POLICY:China’s largest steel producing province Hebei saw its steel industry PMI reach 50.7 in October, up from September’s 45.7 and above the 50 mark for the first time in four months, the Hebei Metallurgical Industry Association said.
LIQUIDITY: The PBOC conducted CNY17.3 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY224.3 billion after offsetting the maturity of CNY241.6 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5411% from 1.5508%, Wind Information showed. The overnight repo average decreased to 1.3408% from 1.3425%.
YUAN: The currency strengthened to 7.0974 against the dollar from 7.1160 on Friday. The PBOC set the dollar-yuan central parity rate higher at 7.1203, compared with 7.1135 set on Friday.
BONDS: The yield on 10-year China Government Bonds was last at 2.0900%, down from the previous close of 2.0925%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index gained 1.17% to 3,310.21 while the CSI300 index increased 1.41% to 3,944.76. The Hang Seng Index edged up 0.30% to 20,567.52.
FROM THE PRESS: The People’s Bank of China will likely maintain a relatively high net purchase of government bonds in the short term, and use the outright reverse repo to keep liquidity conditions relatively loose, Economic Information Daily reported, citing analysts. Market liquidity faces tightening pressure from CNY2.9 trillion of maturing medium-term lending facility funds and the increasing possibility of additional government bond issuance by year-end, said analysts at Zhongtai Securities. The PBOC purchased net CNY200 billion of treasuries in October, maintaining net buying for the third consecutive month, the Daily said.
China’s visa-free travel policy will be expanded for normal passport holders from Slovakia, Norway, Finland, Denmark, Iceland, Andorra, Monaco, Liechtenstein and South Korea, China’s Foreign Ministry has announced. The move will take effect from Nov 8 and would further facilitate personnel exchanges between China and foreign countries, Foreign Ministry spokesman Lin Jian noted.
Chinese authorities have lowered the equity investment threshold for foreign investors in a bid to encourage long-term and value investment, Securities Times reported. The revised rules shorten the lockup period for overseas investors to 12 months from three years and lower asset requirements for non-controlling shareholders. The new rules allow non-Chinese investors to make strategic investments in listed companies and make tender offers, the newspaper said.