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MNI China Daily Summary: Thursday, August 17
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY168 billion in 7-day reverse repos, with the rates unchanged at 1.80%. The operation led to a net injection of CNY163 billion after offsetting maturities of CNY5 billion, according to Wind Information. The operation was aimed at keeping banking system liquidity reasonable and ample, the PBOC said on its website.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8964% from 1.8533%, Wind Information showed. The overnight repo average rose to 1.8625% from the previous 1.8480%.
YUAN: The currency weakened to 7.3103 against the dollar from 7.2904 on Wednesday. The PBOC set the dollar-yuan central parity rate higher at 7.2076, compared with 7.1986 on Wednesday. The fixing was estimated at 7.2994 by a Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.6210%, up from Wednesday's close of 2.6200%, according to Wind Information.
STOCKS: The Shanghai Composite Index closed up 0.43% at 3,163.74, while the CSI300 index increased 0.33% to 3,831.10. The Hang Seng Index edged down 0.01% to 18,326.63.
FROM THE PRESS: China should focus on boosting domestic demand and continue expanding policy space for consumption and investment, which includes spending on big-ticket items and mobilising enthusiasm for private investment, said Premier Li Qiang in a State Council meeting on Wednesday. Li urged officials to implement and strengthen the coordination of macro policies to ensure the completion of annual goals and promote high-quality development. (Source: Gov.cn)
The world economy will not stop globalisation but is undergoing value and supply-chain adjustments, according to Chen Deming, a former minister of the Ministry of Commerce. Speaking at the 3rd China-Europe Beijing Forum, Chen said the world faces climate and environmental risks that require an open world economy to find solutions. Lamy Pascal, former Director-General of the World Trade Organization said China's overall attractiveness to foreign capital has weakened this year given heightened geopolitical tensions and sluggish consumer demand. (Source: Yicai)
Investors are expecting a reduction or even cancellation of A-share stamp duty as top policymakers seek to boost capital markets. Lower investment costs will promote active trading, as stamp duty accounted for about 55% of IPOs in H1, totalling CNY110.8 billion, said Lu Zhe, chief economist of Topsperity Securities. Analysts noted authorities have made four changes to stamp duty since 2000, which all immediately boosted market sentiment. The State Council has the flexibility to adjust stamp duty with the authorisation of the National People's Congress. China's stock market currently applies a 1‰ stamp duty rate. (Source: The Paper)
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