MNI China Daily Summary: Tuesday, February 11
POLICY: China’s Small and Medium-Sized Enterprise Development Index reached 89.0 in January, up 0.1 points from December, according to the China Association of Small and Medium Size Enterprises.
POLICY: China has issued guidelines to increase the number of trains designed for elderly tourists by 2027, including expanded routes and onboard products, according to nine ministries, including the Ministry of Commerce.
LIQUIDITY: The PBOC conducted CNY33 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY33 billion as no reverse repos mature today, according to Wind Information.
RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.9014% from 1.8038%, Wind Information showed. The overnight repo average rose to 1.9114% from 1.8541%.
YUAN: The currency strengthened to 7.3061 from 7.3077 at Monday's close. The PBOC set the dollar-yuan central parity rate higher at 7.1716, compared with 7.1707 set on Monday. The fixing was estimated at 7.3072 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.6000%, down from Monday's close of 1.6200%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index lost 0.12% to 3,318.06 while the CSI300 index edged down 0.46% to 3,883.14. The Hang Seng Index fell 1.06% to 21,294.86.
FROM THE PRESS: China must prioritise raising consumption levels to expand domestic demand, said Premier Li Qiang during a State Council Executive Meeting. Li said authorities must support a reasonable increase in residents' wages and broaden channels for property income. Multinational firms absorb employment, stabilise exports, and promote industrial upgrading, Li argued, adding officials should expand the scope of industries that encourage foreign investment. China will encourage foreign investment in equities and optimise merger and acquisitions rules. (Source: Yicai)
China’s Chief Economist Confidence Index reached 50.62 in February, down from 50.66 in January, but remaining above the expansionary 50 mark for the fifth month, reported Yicai.com, who compiled the index. Economists surveyed expect the upcoming Two Sessions to announce targets for GDP growth of 5%, with the fiscal deficit at 4% and CPI below 3%. Lian Ping, president at Guangkai Research Institute, expects central to local government transfers to exceed CNY11 trillion this year, with special local government bonds reaching CNY4.5 trillion and over CNY2 trillion of long-term special government bonds issued. (Source: Yicai)
China’s Warehousing Index reached 52.5% in January, a 10 month high and up 1.9 percentage points from December, according to the China Federation of Logistics and Purchasing. Yang Biao, deputy general manager of China Reserve Development Co, who contributed to the index, said warehousing activity rose significantly in January driven by holiday consumer demand. The average inventory turnover sub-index reached 53.2%, up 1pp from December, with food, household appliances, agricultural, non-ferrous metals, machinery and equipment sectors higher than 50%, offset by steel and chemical industries which were less than 50%. (Source: Securities Daily)