MNI China Daily Summary: Tuesday, December 31
DATA: China's Manufacturing Purchasing Managers Index fell by 0.2 points to 50.1 in December, though staying above the 50 mark for a third straight month, data from the National Bureau of Statistics showed. Non-manufacturing PMI registered 52.2, up 2.2 points from the previous month.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY157.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY93.6 billion after offsetting the maturity of CNY64.1 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.0040% from 1.9195%, Wind Information showed. The overnight repo average rose to 1.6474% from 1.3673%.
YUAN: The currency strengthened to 7.2988 against the dollar from the previous 7.2992. The PBOC set the dollar-yuan central parity rate lower at 7.1884, compared with 7.1889 set on Monday. The fixing was estimated at 7.3078 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.6725%, down from the close of 1.7010% previously, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index was down 1.63% to 3,351.76, while the CSI300 index lost 1.60% to 3,934.91. The Hang Seng Index edged up 0.09% at 20,059.95.
FROM THE PRESS: The PBOC should cut the reserve requirement ratio and interest rates in a timely way and make good use of monetary tools including open market operations to maintain ample liquidity to continuously increase support for the real economy, wrote Han Wenxiu, deputy director of the Office of the Central Financial and Economic Affairs Commission in an article published by the party-run People's Daily. It's also necessary to maintain relatively fast credit growth and lower financing costs, while stablising the currency at an equilibrium level, said Han.
Volume of Panda Bond issuance is likely to rise further in 2025 as the relatively low financing costs in China remains attractive to foreign investors, China Securities Journal reported, citing analysts. As of Dec 30, a total of 109 panda bonds were issued this year, totaling CNY194.8 billion, a rise of 16% and 26% y/y. The yield of active panda bonds is as high as 10%, showing great investment value against the backdrop of structural asset shortage in the domestic bond market, the newspaper said citing Bai Xue, deputy research head from Golden Credit Rating.
China's Ministry of Finance said the proportion of electric vehicles in the total annual official vehicle procurement should not be less than 30% in principle, China Securities Journal reported citing a statement on MOF website. The procurement ratio for EVs should be 100% for official vehicles with relatively fixed routes and single usage scenarios, and mainly operating in urban areas such as vehicles for confidential communication, the statement said.