MNI China Daily Summary: Tuesday, February 13

     TOP NEWS: China new loans issued so far in February are also sizeable

following January's record lending, Caixin reported, citing banking sources. The

PBOC began to give orders to banks to contain the size of new lending. Banks

lent $460.7 billion in new loans through Jan, up 396.24% from Dec. Banks usually

lend more at the start of the year to maximize interests and tap a strong

demand, Caixin said. 

     LIQUIDITY: The PBOC injected net CNY393 billion by 1-year Medium-term

Lending Facilities (MLF) loans at a rate of 3.25% to add liquidity in advance to

offset a drain on Feb. 22, the first trading day after the Chinese New Year, by

the maturity of MLF loans and part of Contingent Reserves allowances (CRA), tax

payments and reserves payments. CNY243.5 billion MLF loans scheduled to mature

on Thursday to be postponed to Feb. 22.

     RATES: Interbank market rates diverged. The 7-day repo average was last at

2.7847%, lower than 2.8703% Monday. Overnight repo average 2.5789%, higher than

2.5711% yesterday.

     YUAN: The Chinese yuan fell to 6.3360 against the U.S. dollar from Monday's

6.3290 closing, following today's much weaker fixing. The PBOC set the yuan

central parity rate vs the U.S. dollar at 6.3247, much weaker than Monday's

6.3001.

     BONDS: Yield on the 10-year China Government Bond last traded 3.8700%, down

from 3.8850% close: Wind Information.

     STOCK: The Shanghai Composite Index closed up 0.98% to 3184.96, while Hong

Kong's Hang Seng Index was last at 2,9842.97, up 1.29%.

     FROM THE PRESS: China should monitor instances of liquidity shortage as it

pushes forward the financial deleveraging campaign, Securities Daily commented

on its front page. Recent capital market indicates liquidity issues. From Jan 25

to Feb 9, the Shanghai Composite plunged about 12%, which can be attributed to

the monetary policy curbs, Daily said. 

     China's asset-backed securitization (ABS) will expand at a rapid pace

benefitting from the new rules on assets management, the China Securities

Journal reported. More than CNY1 trillion ABS products were sold in 2017, the

first time ever, Journal cited China Central Depository & Clearing Ltd. As the

new rule will enhance restriction on non-standard products, the high-yield

standard products including ABS will be more attractive.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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