MNI China Daily Summary: Tuesday, August 22

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY111 billion in 7-day reverse repos, with rates unchanged at 1.80%. The operation led to a net drain of CNY93 billion after offsetting maturities of CNY204 billion, according to Wind Information. It aims to keep 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) decreased to 1.8319% from 1.8857%, Wind Information showed. The overnight repo average decreased to 1.8275% from 1.9445%.

YUAN: The currency strengthened to 7.2935 to the dollar from 7.3139. The PBOC set the dollar-yuan central parity rate at 7.1992, compared with 7.1987 set on Monday. The fixing was estimated at 7.3103 in a Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.6080%, up from Monday's close of 2.5940%, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.88% to 3,120.33, while the CSI300 increased 0.77% to 3,758.23. The Hang Seng Index was up 0.95% to 17,791.01.

FROM THE PRESS: China can jointly safeguard international trade rules and ensure the stability of global supply chains with the U.S., according to Premier Li Qiang. Li, speaking at a U.S.-China Business Council event, said China would continue opening up and demonstrate global responsibility as a major country. Policymakers would continue to expand market access for foreign firms, promote fair competition and protect IP rights, Li said. U.S. officials said they support the development of healthy and stable U.S.-China bilateral relations and economic and trade cooperation between the two countries. (Source: 21st Century Business Herald)

China will improve visa issuance, increase the supply of services and implement preferential tax policies for foreign-funded projects, according to a statement from the Ministry of Commerce (MOFCOM). The ministry recently met with 80 representatives of foreign-funded enterprises and business associations to understand how China can improve the business environment for foreign firms. MOFCOM also held a press conference where Assistant Minister Chen Chunjiang said China would expand services trade through deepening international cooperation and create new growth points for service exports. (Source: Securities Daily)

Share buybacks spurred by policy support may help to halt the downward trajectory of the A-share market. According to Wind, in the month to Aug 21, at least 151 listed companies have issued share repurchase announcements. A wave of buybacks may signal the market has bottomed as listed companies and financial institutions buy low. The China Securities Regulatory Commission said last Friday it will further optimise the share repurchase system to support more listed companies to stabilise and boost stock prices in this way. The Shanghai Stock Exchange Index recently fell below 3,100 points and the ChiNext Index dropped below 2,100 points, hitting a three-year low. (Source: 21st Century Business Herald)