MNI China Daily Summary: Tuesday, June 11

DATA: China’s SME development index reached 89.2 in May, down 0.2 points from April but higher than the 88.9 level seen in the same month last year, the China Association of Small and Medium Sized Enterprises said.

LIQUIDITY: The PBOC conducted CNY2 billion via 7-day reverse repo, with the rates unchanged at 1.80%. The operation has led to a net drain of CNY2 billion after offsetting the CNY4 billion maturity today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.8093% from 1.7718%, Wind Information showed. The overnight repo average decreased to 1.6840% from the previous 1.7266%.

YUAN: The currency weakened to 7.2541 from 7.2426 against the dollar from Monday. The PBOC set the dollar-yuan central parity rate higher at 7.1135, compared with 7.1106 set before Dragon Boat Festival holiday.

BONDS: The yield on 10-year China Government Bonds was last at 2.2800% down from 2.2850% at Monday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged down 0.76% to 3,028.05 while the CSI300 index fell 0.87% to 3,542.88. The Hang Seng Index was down 1.04% to 18,176.34.

FROM THE PRESS: Further measures to reduce housing stocks are expected after China’s State Council executive meeting on June 7 pledged to study and reserve new policies to destock and stabilise the real- estate market, Securities Daily reported. Analysts said the central bank will further increase the scale of pledged supplementary lending and re-lending facilities to increase support for local state-owned enterprises to buy up unsold housing. A new destocking policy may also include expanding the renovation of urban villages and purchasing existing housing for resettlement, the newspaper said citing analysts.

A China private chief economist confidence index reached 50.23 in June, down from 50.52 in May, but above the 50 level, with participants noting a gradual improvement in conditions. Chief economists forecast May’s CPI at 0.38%, PPI at -1.56%, retail sales at 3.41% y/y, and industrial added value at 5.99%, according to the index published by First Financial Research Institute. Economists' expectations on LPR cuts remained low, with only two of the seventeen participants expecting a lower rate over the next month. Wang Han from Industrial Securities, said April saw stronger external demand than domestic demand, and the momentum of economic recovery slowed. (Source: Yicai)

A total of 110 million domestic tourism trips were made during the three-day Dragon Boat Festival holiday, a rise of 6.3% y/y, with the tourism revenue totalling CNY40.35 billion, an increase of 8.1%, according to the data center of the Ministry of Culture and Tourism. Outbound tourism to Japan, Thailand, Malaysia and South Korea were also popular, and international cruise bookings increased more than 14 times year-on-year during the holiday, Economic Daily reported.