May 25, 2022 02:03 GMT
MNI picks keys stories from today's China press
The following lists highlights from Chinese press reports on Wednesday:
- More foreign investment institutions set yuan equilibrium levels at CNY6.5 to CNY6.6 against the U.S. dollar, over 2,000 basis points higher than that at end-April, the 21st Century Business Herald reported citing traders. The falling dollar index has driven the yuan rally in the past week, but more importantly, overseas investors are correcting previous mispricing following China’s proactive moves to stabilise growth and resume production from Covid-19 lockdowns. Overseas institutions prefer the relatively stable economic fundamentals of China, as the Fed’s continuous rate hikes increase the risk of U.S. recession, the newspaper said citing an unnamed hedge fund manager.
- China’s monetary policy has ample space and diversified tools to push the economy back to a normal track with the priority to drive credit expansion to boost SME loans, the China Securities Journal reported citing analysts. The People’s Bank of China has doubled the amount of supporting tools for SME loans, and it is expected to provide as much as 2% of the incremental balance of SME loans to local banks, the newspaper said citing analysts. The central bank will maintain ample liquidity and not rule out further RRR cuts and expansion of re-lending and re-discount quotas, the newspaper said citing Gao Ruidong, chief macroeconomist of Everbright Securities.
- The A-share market is still grinding at the bottom with the Shanghai Composite Index likely to fluctuate between 2,900 to 3,200 points, though better than the risk aversion and panic environment in the first four months, the National Business Daily reported citing Fang Yi, chief strategy officer of Guotai Junan. A total of 2,934 A-shares fell by more than 4% on Tuesday, accounting for 62.8% of all A-shares still trading, and the Shanghai Composite Index saw the biggest drop since May to 3,070.93, the newspaper said. The decline was led by emerging tech stocks, and any rebounds may depend on how global inflation and China-U.S. relations go, the newspaper said citing analysts.