MNI China Daily Summary: Tuesday, October 24

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY593 billion via 7-day reverse repo on Tuesday, with the rate unchanged at 1.80%. The operation has led to a net injection of CNY522 billion after offsetting the maturity of CNY71 billion reverse repos today, according to Wind Information.

RATES: China's seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 2.0867% from 2.0040%, Wind Information showed. The overnight repo average decreased to 1.9322% from the previous 1.9651%.

YUAN: The currency strengthened to 7.3075 against the dollar from 7.3150 on Monday. The PBOC set the dollar-yuan central parity rate lower at 7.1786, compared with 7.1792 set on Monday. The fixing was estimated at 7.3007 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 2.7350%, up from 2.7250% at Monday's close, according to Wind Information.

STOCKS: The Shanghai Composite Index edged up 0.78% to 2,962.24 while the CSI300 index rose 0.37% to 3,487.13. The Hang Seng Index was down 1.05% to 16,991.53.

FROM THE PRESS: China is likely to allocate some 2024 local government bonds in advance to help boost the economy and will likely release quota within the year, with issuance to start at the beginning of 2024. The front-loaded quota could total as much as 60% of the new local-government debt limit for next year. (Source: 21st Century Business Herald)

Central Huijin Investment, the domestic arm of China’s sovereign wealth fund China Investment Corporation, bought exchange-traded funds on Monday to shore up the sagging stock market. It did not elaborate on the amount of ETFs it purchased but said it will keep increasing such holdings in future. Earlier this month, the state-run fund also boosted its stake in the A-shares of the nation’s Big Four lenders. Huijin’s purchase of ETFs will have a more obvious driving effect on the market, while other conventional policies have limited impact amid a vicious cycle of irrational capital outflows, said Li Zhan, chief economist of China Merchants Fund. (Source: Yicai)

China will optimise its social security system through better classifying and monitoring of low income groups according to their needs, so the achievement of reform and opening can benefit those in poverty, a State Council policy document said. In future, government departments will better coordinate their social security resources and share information in order to deliver assistance better. China will improve its database management to ensure it can deliver benefits faster and according to dynamic situations. (Source: Yicai)