MNI: China Press Digest, Feb 22: Yuan, Property Sales, WMPs

     BEIJING (MNI) - The following are highlights from the Chinese press for

Thursday:

     Offshore yuan CNH dropped 0.56% during the Spring Festival after some

fluctuations during the period, Securities Daily reported Thursday. The

fluctuations put an end to the appreciation seen over the past two weeks, and

shows market expectations have diverged. Less foreign exchange settlements and

an increased need for foreign currencies for Chinese outbound tourism have both

contributed to the dip as well. The US dollar is stabilising and trending

stronger, restraining further gains in the yuan. The PBOC's Monetary Policy

Report for the fourth quarter stressed the need to deepen reform of the yuan

exchange rate formation schedule. It noted that continuing the reform would

increase the market's role in deciding the yuan exchange rate, and government

intervention would decrease.

     Lower-tiered cities in China saw an increase in house sales promotions,

which were aimed at attracting city-based workers visiting families in less

developed cities during the Spring Festival, reported China Securities Journal

on Thursday. Sales in some promotional property projects are robust, having sold

more than 200 houses in less than a month right before the Spring Festival in

Xi'an. Housing purchase restrictions for talents continued to loosen in Tier 2

cities, but research institutions and property companies do not pay enough

attention to this buyer group - thus the real demand for home purchases has not

actually changed.

     Financial institutions are following tighter regulations on wealth

management products this Chinese New Year, though they continue to compete

fiercely for more WMP businesses, reported Shanghai Securities News on Thursday.

Illegal WMPs such as P2P products cannot be found in retail banks, and yields of

WMPs do not exceed 6%. Banks also obey new rules prohibiting them from

guaranteeing investors to receive principal or a certain yield. During Chinese

New Year, WMPs are sold out quickly, partly because banks increase yields in

order to get money before the Spring Festival.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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