MNI China Daily Summary: Tuesday, March 18
POLICY: China’s electricity consumption rose 8.6% y/y in February to 743.4 billion kilowatt hours, data from the National Energy Administration showed, driven by a 12.4% increase in industrial demand.
POLICY: Beijing municipality’s industrial enterprise added value increased 6.4% y/y during January and February, driven by automobile and electronic communication manufacturing up 33.7% and 20.3%, data from the city’s statistics department showed.
POLICY: China produced 166 million tonnes of crude steel during January to February, down 1.5% y/y, data from the China Iron and Steel Association showed.
LIQUIDITY: The PBOC conducted CNY273.3 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY235.6 billion after offsetting the maturity of CNY37.7 billion today. There is another CNY120 billion treasury cash deposit matures today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.9609% from 1.8978%, Wind Information showed. The overnight repo average fell to 1.7949% from 1.8086%.
YUAN: The currency strengthened to 7.2216 against the dollar from the previous 7.2388. The PBOC set the dollar-yuan central parity rate higher at 7.1733, compared with 7.1688 set on Monday. The fixing was estimated at 7.2290 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.8900%, down from the close of 1.9050% previously, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index rallied 0.11% to 3,429.76, while the CSI300 index rose 0.27% to 4,007.72. The Hang Seng Index gained 2.46% at 24,740.57.
FROM THE PRESS: China saw net inflows of cross-border funds in February, with a surplus of enterprises and individual payments totalling USD29 billion, said Li Bin, deputy director at the State Administration of Foreign Exchange. Foreign investors increased their net holdings of domestic bonds and stocks by USD12.7 billion, amid the country’s economic recovery and technological development. Goods trade saw net inflows reach USD64.8 billion, a relatively high level for the month historically. (Source: China Securities Journal)
Beijing’s CNY300 billion special treasury funds for consumer goods trade-ins are expected to drive a net increase of CNY700-800 billion in consumption and quicken spending on goods by 1.5-1.6 percentage points, said Wang Qing, chief macro analyst at Golden Credit Rating. Government childcare subsidies could reach CNY100 billion, Wang estimated, based on a CNY10,000 subsidy for 10 million newborns, though policies may vary across local governments. (Source: 21st Century Business Herald)
China’s added value of industrial enterprises increased by 5.9% year-on-year during January and February, slower than December’s 6.2%, due to factors including reduced working days and the imposition of tariffs, according to experts interviewed by Yicai. Looking ahead, Wang Qing, chief macro analyst at Orient Securities, said the growth rate of industrial added value was expected to ease to around 5.5% in March as trade tariffs and a high base level take effect. A recovery in domestic demand and the development of new productive forces can offset an expected slowdown in exports this year, Wang added.