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MNI China Press Digest Jan 30: PBOC, He Lifeng, Evergrande

MNI (BEIJING)
BEIJING (MNI)

MNI picks key stories from today's China press

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Highlights from Chinese press reports on Tuesday:

  • The People’s Bank of China will continue with large-scale injections via reverse repos to offset the liquidity gap due to increasing demand for cross-month capital and cash withdrawals before the Chinese New Year, Shanghai Securities News reported citing analysts. Meanwhile, about CNY2 trillion reverse repos will mature this week, with over CNY400 billion expiring daily from Tuesday to Friday. The central bank will need to inject about CNY1.5 trillion in liquidity to fill the gap, which means it still needs to inject some short-term funds after announcing a 50bp cut to bank's reserve requirement ratios that can release CNY1 trillion of long-term funds, said Li Yishuang, chief fixed income analyst at Cinda Securities.
  • China’s vice premier He Lifeng has called on authorities to support listed firms to promote high-quality financial development, improve confidence and stabilise the capital market. In a video conference meeting, He noted listed companies played an important role in the micro-foundation for high-quality development and support was needed to boost self-reliance in science and technology, construct a modern industrial system, and enhance market confidence. On real-estate, He urged authorities to establish a financing mechanism and implement financing projects quickly. The government would resolutely prevent illegal misappropriations of pre-sale funds, He added. (Source: Yicai)
  • The Hong Kong judge's decision to liquidate China Evergrande will not directly impact the group’s domestic business, according to Li Shuguang, professor at China University of Political Science and Law. Li noted each company in the group would remain an independent legal entity, as China Evergrande was an overseas holding platform company. Under this structure, domestic subsidiaries would maintain normal and orderly operations under the existing management and model, Li added. Domestic bond holders were creditors of Evergrande Real Estate and had their rights protected under Chinese law. (Source: Yicai)
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Highlights from Chinese press reports on Tuesday:

  • The People’s Bank of China will continue with large-scale injections via reverse repos to offset the liquidity gap due to increasing demand for cross-month capital and cash withdrawals before the Chinese New Year, Shanghai Securities News reported citing analysts. Meanwhile, about CNY2 trillion reverse repos will mature this week, with over CNY400 billion expiring daily from Tuesday to Friday. The central bank will need to inject about CNY1.5 trillion in liquidity to fill the gap, which means it still needs to inject some short-term funds after announcing a 50bp cut to bank's reserve requirement ratios that can release CNY1 trillion of long-term funds, said Li Yishuang, chief fixed income analyst at Cinda Securities.
  • China’s vice premier He Lifeng has called on authorities to support listed firms to promote high-quality financial development, improve confidence and stabilise the capital market. In a video conference meeting, He noted listed companies played an important role in the micro-foundation for high-quality development and support was needed to boost self-reliance in science and technology, construct a modern industrial system, and enhance market confidence. On real-estate, He urged authorities to establish a financing mechanism and implement financing projects quickly. The government would resolutely prevent illegal misappropriations of pre-sale funds, He added. (Source: Yicai)
  • The Hong Kong judge's decision to liquidate China Evergrande will not directly impact the group’s domestic business, according to Li Shuguang, professor at China University of Political Science and Law. Li noted each company in the group would remain an independent legal entity, as China Evergrande was an overseas holding platform company. Under this structure, domestic subsidiaries would maintain normal and orderly operations under the existing management and model, Li added. Domestic bond holders were creditors of Evergrande Real Estate and had their rights protected under Chinese law. (Source: Yicai)