MNI China Daily Summary: Tuesday, March 11
EXCLUSIVE: China’s low levels of inflation provide ample room for additional fiscal and monetary stimulus, a senior policy advisor told MNI, adding that the central bank should continue to support the yuan, but currency depreciation should not limit its easing.
EXCLUSIVE: China needs additional official support for its property market to consolidate a recent stabilisation in home sales, including faster moves to restructure real-estate developers to avoid large-scale defaults, a senior policy advisor told MNI.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY37.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY0.5 billion after offsetting the maturity of CNY38.2 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) decreased to 1.8065% from 1.8149%, Wind Information showed. The overnight repo average fell to 1.7678% from 1.8059%.
YUAN: The currency strengthened to 7.2306 against the dollar from the previous 7.2649. The PBOC set the dollar-yuan central parity rate higher at 7.1741 on Tuesday, compared with 7.1733 set on Monday. The fixing was estimated at 7.2639 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.7844%, down from the close of 1.7850% previously, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index was up 0.41% to 3,379.83, while the CSI300 index gained 0.32% to 3,941.42. The Hang Seng Index was broadly flat, down just 0.01% at 23,782.14.
FROM THE PRESS: China’s second-hand housing market transaction volume increased 38.45% y/y last week in 10 key cities, continuing the recent recovery, Securities Times reported. Second-hand transactions in first-tier Shenzhen have risen five consecutive weeks as purchasing sentiment increased, the newspaper said. Key cities are anticipated to ease restrictive policies further, while all regions are set to intensify efforts to support buyers utilising their Housing Provident Fund, according to the China Index Academy.
China saw new car average prices reach CNY30,000 during the first two months of the year, a decrease of 12.6%, with new energy vehicles down 13%, data from the Passenger Car Association showed. Plug-in hybrid models saw price reductions of less than 10%, indicating stronger demand, the Association said. The market will heat up after March as the government introduces subsidies, easing the ongoing price war.
China’s railways transported 726 million passengers over January and February this year, up 4.7% y/y and setting a record high, data from the China State Railway Group showed. A representative from the Group said the nation saw an accelerated movement of students, migrant workers, families visiting relatives and tourists, leading to a strong growth in railway passenger traffic. (Source: Securities Daily)