MNI China Daily Summary: Wednesday, October 16

     LIQUIDITY: The People's Bank of China (PBOC) injected CNY200 billion via

1-year medium-term lending facility (MLF) with the rate unchanged at 3.3%. The

central bank skipped conducting reverse repos today, according to a statement on

the PBOC website. MNI noted that this was a net injection into the banking

system, with no other instruments maturing.

     RATE: The 7-day weighted average interbank repo rate for depository

institutions (DR007) increased to 2.7097% from Tuesday's close of 2.6932%, Wind

Information showed. The overnight repo average fell to 2.6857% from Tuesday's

2.7055%.

     YUAN: Dollar-yuan weakened to 7.1030 compared with 7.0778 yesterday. The

PBOC set the dollar-yuan central parity rate weaker at 7.0746, compared with

7.0708 on Tuesday.

     BONDS: The yield on the benchmark 10-year China Government Bond was last at

3.1650%, up from 3.1625% on Tuesday, according to Wind Information. 

     STOCKS: The Shanghai Composite Index fell 0.41% to 2,978.71. Hong Kong's

Hang Seng Index increased 0.61% to 26,664.28.

     FROM THE PRESS: China plans to help the banking and insurance industry

improve operational and investment environment, the Economic Information Daily

reported. The move follows measures introduced yesterday to ease restrictions on

foreign banks, allowing them to set up branches and wholly owned units. Foreign

insurers can also establish units in China with foreign financial institutions

as shareholders, according to a statement on the State Council's website

released Tuesday.

     Credit demand in China in Q4 may rise from a year ago driven by local

governments to refinance debt and fund infrastructure projects, the Securities

Times reported. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]