MNI China Press Digest Aug 13: Deposit Rates, Bonds, Pork

Highlights from Chinese press reports on Tuesday:

• The banking sector could further cut deposit rates causing depositors to seek higher returns from financial management products, Securities Daily reported citing Wang Qing, analyst at Golden Credit Rating. Smaller banks have followed state-owned banks in cutting deposit rates up to 80 basis points since August, bringing medium- and long-term deposits to just over 2%, the newspaper said. The move would support banks to stabilise net interest margin and allow for loan interest rates reductions, the newspaper said, citing analysts.
• Local government use of treasury and special treasury bonds has suffered from irregular management, delayed construction and idle funds, recent audits revealed. In Shandong province, auditors found CNY767 million of the assigned CNY31.3 billion was idle and 10 of the planned 304 projects had failed to start. Luo Zhiheng, chief economist of Yuekai Securities said authorities should ensure solid project preparation to avoid delays later and enhance supervision. (Source: Yicai)
• Analysts expect pork prices to rise further as demand for pork increases during the peak Q3 consumption period, according to Yicai news outlet. Prices will remain high until late November given continued supply pressure, agricultural analysts said. China Pig Farming Network data showed domestic live pig prices reached 21.26 yuan/kg on Aug 12, up 23.5% year-on-year and 14.06% month-on-month, Yicai noted. However, Q2 price increases were driven by supply factors without any significant change in demand, an analyst said.