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CHF LIBOR FIX - 16-09-2021

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     TOP NEWS: China is unlikely to ease controls over the value of its currency
or allow free capital outflows for at least a decade for fear of a possible
massive exodus of money, a senior official close to the People's Bank of China
told MNI. The central bank will also keep the value of the yuan in a targeted
range of between 6.5 to 6.6 against the U.S. dollar until at least the end of
this year to support exports, the official said in an interview last week,
declining to be identified because of government policies against officials
making unfiltered comments.
     TOP NEWS: The designation of North Korea as a state sponsor of terrorism by
the U.S. will only further alienate the Asian country and make the prospects for
talks much dimmer, the official English-language China Daily wrote in an
editorial published on Wednesday. The move may even eliminate the possibility of
any talks and could lay waste to the efforts of China and Russia to bring North
Korea back to the negotiation table. Instead, the designation could be used by
Pyongyang as a pretext to renew its weapons tests, restarting a cycle of
escalating tensions, the newspaper argued. (China Daily)
     POLICY: With the government trying to further curb speculation in the
red-hot property market, China is now expected to implement a property tax
within the next couple years, judging by signals from government officials and
other experts. A comprehensive property tax in theory would help bring down
property prices by making it more expensive for investors to hold property,
which in turn would clamp down on speculators. But Yi Xianrong, an outspoken
property expert and economics professor at Qingdao University in Shandong
Province, told MNI that the impact of the currently proposed property tax
mechanism "would be very limited."
     LIQUIDITY: The PBOC announced on its website Wednesday morning that it
injected CNY100 billion in liquidity via seven-day reverse repos, CNY80 billion
via 14-day reverse repos and CNY10 billion via 63-day reverse repos, with rates
unchanged at 2.45%, 2.60% and 2.90%, respectively. The PBOC did not give further
explanations about its operations this morning. This resulted in a net zero
injection/drain for the day, as a total of CNY190 billion in reverse repos
matured on Wednesday. 
     DATA: State-owned enterprises' revenue grew 15.4% in the first 10 months of
this year, compared with the same period last year, to CNY42 trillion, the
Ministry of Finance reported Wednesday. Profit rose 24.6% year-on-year to CNY2.4
trillion. As of the end of October, SOE assets were worth CNY150.6 trillion, up
10.8% from last year, but liabilities grew at a similar pace, 10.6%, reaching
CNY99.2 trillion, the report said. SOEs saw large increases in profit in the
nonferrous metal, steel, coal and petroleum sectors, while the electricity
sector saw a relatively large profit drop.
     RATES: Money market rates were lower on Wednesday. The seven-day repo
average was last at 2.8840%, compared with Tuesday's average of 2.9223%. The
overnight repo average was at 2.8036%, compared with Tuesday's 2.8512%.
     YUAN: The yuan rose against the U.S. dollar after the People's Bank of
China set the fixing rate stronger for the day. The yuan was last at 6.6181
against the U.S. unit, compared with the official closing price of 6.6337 on
Tuesday. The PBOC set the yuan central parity rate at 6.6290, stronger than
Tuesday's 6.6356. 
     BONDS: The yield on benchmark 10-year China government bonds was last at
4.0050%, compared with the previous close of 3.9550%.
     STOCKS: Stocks were up, led higher by the gas production and supply sector.
The benchmark Shanghai Composite Index closed up 0.59% at 3,430.46. Hong Kong's
Hang Seng Index was 0.76% higher at 30,044.03.
     FROM THE PRESS: The yuan is expected to maintain short-term stability, the
China Securities Journal reported Wednesday. The U.S. dollar could fall slightly
due to concerns that American tax overhaul legislation may not be passed this
year, but because economic fundamentals are strong in the U.S., the dollar is
unlikely to decline much. On the other hand, analysts said, the yuan will be
buoyed by China's strong fundamentals and stability-encouraging policies. The
dollar index and yields of U.S. Treasuries are expected to experience
small-scale fluctuations due to uncertainties about the tax overhaul. Although
the CFETS yuan exchange rate index has dropped for two weeks, it is still within
a recent average, so there are no signals of depreciation, the report said. As
long as the dollar index fluctuates within a tight range, the CFETS index will
also tend to keep within that range, the newspaper said. (China Securities
Journal)
     The Ministry of Land and Resources is leading a nationwide examination of
the sale of residential land to property developers, the Economic Information
Daily reported Wednesday. Provincial regulators are required to submit summary
reports by the end of this month. The campaign aims to clamp down on the illegal
stockpiling of residential land and delays in paying for the land or related
taxes, the report said. The examination covers 70 medium to large cities and the
hotspot city Suzhou, as well as some cities that have experienced rapid growth
of land and housing prices, such as Haikou and Sanya in Hainan Province. The
examination is looking at whether a property developer has begun construction on
time as indicated in its contract, the stage of the project and the developer's
payment for the land, the report said. An unidentified person working in the
property sector told the newspaper that the punishment for violating the law
with such projects is not strict enough. (Economic Information Daily)
     As the Chinese government clamps down on rampant growth and illegal
practices in the payday loan business, financial institutions have begun to
sever their ties with payday loan companies, the Securities Times reported
Wednesday. On Tuesday, Sesame Credit, an online credit scoring provider that is
part of the Alibaba-affiliated Ant Financial, announced it would stop working
with some payday loan companies because their interest rates were above the
maximum rate set by the government, they used illegal methods to collect money
from borrowers and they failed to follow their contracts, the report said. Given
the tighter regulation, payday loan transactions are expected to drop in
November and December, in contrast with rapid growth of 372% in October compared
with the same month last year, to CNY12 billion. (Securities Times)
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
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