Free Trial

MNI China Daily Summary: Tuesday, June 3

     EXCLUSIVE: China will move to recapitalise private and small banks to free
up credit for small businesses hit by coronavirus disruption and sagging global
demand, a People's Bank of China official told MNI, with another senior central
bank manager and a policy advisor noting that exporters will be a particular
focus for assistance.
     LIQUIDITY: The PBOC skipped open market operations on Wednesday, resulting
in a net drain of CNY120 billion given the same amount of reverse repos matured,
according to Wind Information. Total liquidity in the banking system is
reasonable and ample, the PBOC said on its website.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) increased to 1.9597% from Tuesday's close 1.5062%, Wind
Information showed. Overnight repo average rose to 1.8728% from 1.4812%
yesterday. 
     YUAN: The yuan strengthened to 7.1099 against the dollar from Tuesday's
close 7.1105. PBOC set the dollar-yuan central parity rate lower at 7.1074,
compared with the 7.1167 set on Tuesday.
     BONDS: The yield on 10-year China Government Bonds was last at 2.7950%,
down from Tuesday's close of 2.8600%, according to Wind Information.
     STOCKS: The Shanghai Composite Index increased 0.07% to 2923.37. Hong
Kong's Hang Seng Index gained 1.37% to 24325.62. 
     FROM THE PRESS: U.S. interference in China's sovereignty affair is pushing
the offshore yuan lower as worried investors sell off Yuan assets, Tu Yonghong,
a deputy director with the International Monetary Institute under Renmin
University, wrote in a commentary in Economic Daily. The recent yuan
depreciation was also due to liquidity injections by the central bank and
China's worsening trade balances, said Tu, adding the yuan is to be stable given
China's sustained economic momentum and improving trade outlook.
     Chinese local governments may increase land sales to developers in the
second half to make up for revenue shortfalls, the 21st Century Business Herald
reported citing an unnamed source. Developers are being spurred by expansionary
monetary policies to buy land at high premiums, the newspaper said citing Zhang
Dawei, the chief analyst with Centaline Property. Official data showed that
Beijing and Shanghai recorded CNY113.1 billion and CNY104.7 billion in land
transactions from January to May, up 58% and 73% respectively from the same
period last year, said the newspaper.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: archie.zhang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.