MNI China Daily Summary: Monday, September 30
DATA: China's Manufacturing Purchasing Managers Index rose by 0.7 points to 49.8 in September, but remained below the 50 mark for the fifth consecutive month, as production accelerated and demand improved, data from the National Bureau of Statistics showed.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY212.1 billion via 7-day reverse repos, with the rate at 1.50%. The operation led to a net injection of CNY52 billion after offsetting maturities of CNY160.1 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.5551% from 1.8339%, Wind Information showed. The overnight repo average increased to 1.5204% from 1.3379%.
YUAN: The currency strengthened to 7.0156 against the dollar from 7.0160 on Friday. The PBOC set the dollar-yuan central parity rate lower at 7.0074, compared with 7.0101 set on Friday. The fixing was estimated at 7.0080 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.1775%, down from the previous close of 2.2430%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index rallied 8.06% to 3,336.50 while the CSI300 index gained 8.48% to 4,017.85. The Hang Seng Index rallied 2.43% to 21,133.68.
FROM THE PRESS: Guangzhou city lifted all home purchase restrictions on Monday, allowing homebuyers with or without a local Hukou to buy property without quantity limits. Shanghai lowered the minimum downpayment ratio for first and second homes to 15% and 25%, from the previous 20% and 35%. Shanghai also reduced the number of local tax years needed to qualify for purchasing property for non-local residents in suburban areas to one year from three years. Shenzhen reduced the down payment ratios for first and second homes to 15% and 20%, and relaxed rules on first-home recognition for multi-child families. (Source: China News Service)
Chinese chief economists expect additional fiscal stimulus after the central bank unveiled monetary easing and the politburo called for increasing countercyclical measures, Securities Daily reports. Authorities are likely to announce more incremental policies to achieve the annual economic and social development goals in Q4, said Chen Li, chief economist at Sichuan Cai Securities. Officials may issue additional treasury bonds in the final quarter and relax the use of ultra-long-term special treasury bonds and local special bonds.
Authorities should coordinate efforts to effectively solve the economy’s problems and strive to complete the government’s goals and tasks this year, Premier Li Qiang said at a State Council executive meeting. Li called for officials to speed up implementation and launch mature policies immediately. Additionally, new incremental measures should be studied in a timely manner according to changes in the environment, Li added.