MNI China Daily Summary: Thursday, Dec 7

POLICY: China's exports rose 0.5% y/y in November, up from October's 6.4% y/y fall, the first increase in seven months, beating the consensus of a 0.3% y/y decrease, data released by Customs on Thursday showed.

POLICY: China's expansionary macro policy has proved less effective in boosting the economy and have not offset the economy's slowdown compared to traditional growth drivers, which have faded, said Wang Yiming, a member of The People's Bank of China (PBOC) monetary policy committee during Global Wealth Management Forum on Thursday.

LIQUIDITY: PBOC conducted CNY363 billion via 7-day reverse repo on Thursday, with the rate unchanged at 1.80%. The operation has led to a net drain of CNY300 billion after offsetting the maturity of CNY663 billion reverse repos today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8239% from 1.7849%, Wind Information showed. The overnight repo average increased to 1.6239% from 1.6096%.

YUAN: The currency strengthened to 7.1513 against the dollar from 7.1571 on Wednesday. The PBOC set the dollar-yuan central parity rate higher at 7.1176, compared with 7.1140 set on Wednesday. The fixing was estimated at 7.1621 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.6900%, down from Wednesday's close of 2.7000%, according to Wind Information.

STOCKS: The Shanghai Composite Index fell 0.09% to 2,966.21 while the CSI300 index decreased 0.24% to 3,391.28. The Hang Seng Index was down 0.71% to 16,345.89.

FROM THE PRESS: Overseas institutions were net buyers of Chinese bonds for nine consecutive months, according to Securities Daily. Cumulative net foreign purchases over 2023 reached nearly CNY1 trillion, with October alone exceeding CNY200 billion. The amount of debt held by foreign investors has maintained rapid growth since Q3, with an increase of about CNY40 billion in October. The volume will likely continue to increase through November by as much as CNY250 billion.

Six state-owned major banks recently held talks with real-estate developers on the implementation of funding support, according to Yicai. Most banks had committed to equal treatment for private- and state-owned developers, not withdrawing loans for firms with normal operations and actively supporting affordable housing, and supply-side reform of real-estate finance, the news agency said. Anxin Securities Chief Economist Gao Shanwen said the market will monitor leading real-estate developers to see whether fundraising under market-oriented conditions resumes.

Local governments including Henan, Sichuan and Anhui province have proposed cash rewards up to CNY40 million for companies to list publically to drive regional economic development with greater output value, tax revenue and employment contributions. As of Dec 6, 296 companies have listed in the A-share market during the year, raising CNY345.5 billion. Jiangsu province has the largest number of IPOs at 55, followed by 47 in Guangdong and 41 in Zhejiang. (Source: Securities Daily)