MNI China Daily Summary: Wednesday, September 27

     TOPS NEWS: China said that it "totally disapproved of the war of words"

between North Korea and the United States, repeating its view that the two

countries should resolve their differences through diplomatic and political

means. Chinese Foreign Ministry spokesman Lu Kang said Tuesday at a regular

press conference that China had consistently taken the position that the crisis

in the Korean Peninsula should be resolved through peaceful means, and that it

stood by its support of U.N. sanctions against North Korea for its nuclear

weapons testing.

     DATA: Combined profits at Chinese industrial companies rose 24% y/y in

August to CNY671.97 billion, the National Bureau of Statistics said Wednesday.

That compared with an increase of 16.5% y/y in July, the bureau said. The

headline growth rate in August was the highest since August 2013, when it was

24.2%. For the first eight months of this year, total profits rose 21.6% y/y to

CNY4.92 trillion. The growth rate was 0.4 percentage point higher than the 21.2%

gain in the January-July period.

     RATES: Money market rates were mixed on Wednesday after the PBOC drained a

net CNY40 billion via open-market operations. The seven-day repo average was

last at 3.0780%, down from Tuesday's average of 3.1477%. The overnight repo

average was at 2.8883% compared with Tuesday's 2.8845%.

     YUAN: The yuan fell against the U.S. dollar on Wednesday after the People's

Bank of China set a weaker daily fixing. The yuan was last at 6.6378 against the

U.S. unit, declining 0.11% compared with the official closing price of 6.6305 on

Tuesday. The People's Bank of China set the yuan central parity rate against the

U.S. dollar at 6.6192 Wednesday, modestly weaker than Tuesday's 6.6076.

     BONDS: The yield on benchmark 10-year China government bonds was last at

3.5883%, up from the previous close of 3.5747%, according to Wind, a financial

data provider.

     STOCKS: Stocks rose, led higher by the iron ore and coal sectors. The

benchmark Shanghai Composite Index close up 0.05% at 3,345.27. Hong Kong's Hang

Seng Index was 0.37% higher at 27,614.84. 

     FROM THE PRESS: The Asian Development Bank on Tuesday raised its forecast

for Chinese growth this year and next, in line with other international

organizations. Chinese GDP is now seen rising 6.7% this year, revised up from

the bank's previous 6.5% forecast in April. Growth will slow to 6.4% in 2018,

but this was revised up from the 6.2% forecast in April, the ADB said. The bank

attributed the upward revision to China's expansionary fiscal policy, relatively

stable external demand and healthy domestic consumption levels.

     Chinese state-owned enterprises reported relatively strong growth in

revenues and profits in the January-to-August period this year, according to

data released Tuesday by the Ministry of Finance. SOEs' revenue grew 15.5% y/y

to CNY33.07638 trillion, while their profit rose 21.7% to CNY1.91141 trillion.

The steel and non-ferrous metal industries, which saw losses in the same period

last year, returned to profit; the coal, oil, and transportation sectors saw

large y/y increases in profit; while the electricity sector saw a relatively

large y/y profit decline, the ministry said.

     The issuance of Chinese asset-backed securities (ABSs) has boomed this

year, the 21st Century Business Herald reported Wednesday. As of Sept. 26,

CNY171.3 billion in ABSs had been issued, more than four times the volume in the

same period last year and more than twice the full-year volume last year, the

newspaper said, citing data from China Securitization Analytics, an industry

website. The main reason for the ABS boom is the government's increasingly

strict controls on the property sector, leading capital to look for

opportunities in the real economy, the newspaper said. The report also cited an

expert noting that regulators in general are encouraging ABS issuance but

arguing they should give more consideration to whether ABSs truly boost

consumption. (21st Century Business Herald)

--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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