MNI China Press Digest Nov 17: PBOC, A-shares, Home Prices

The following lists highlights from Chinese press reports on Thursday:

• The People’s Bank of China will increase the intensity of prudent monetary policy instead of issuing excessive currency, strengthen cross-cycle adjustment to balance short-term and long-term needs, economic growth and price stability, as well as the internal and external environment, according to the Q3 Monetary Policy Report published on its website. The PBOC will monitor the potential for rising inflation, especially changes on the demand side, and continue to consolidate the favorable conditions for increasing domestic grain production and smooth operation of the energy market, and make appropriate responses to keep the price level basically stable, the statement said. It will also adhere to the market's decisive role in the formation of the exchange rate, strengthen expectations management, and maintain the basic stability of the yuan at a reasonable and balanced level, the statement said.
• There has been a large net inflow of northbound funds for several consecutive days, with foreign investment banks including Goldman Sachs and JPMorgan Chase suggesting clients increase their allocation to Chinese assets, China Securities Journal reported. The net inflow on November 14 was CNY16.6 billion, a new high for a single-day net inflow this year, the newspaper said. Foreign institutions believe the recent decline in A-share market presents a buying opportunity, and A-shares are more resilient against the headwinds of global economy, the newspaper said. The valuations of major A-shares indexes have dropped to historical low levels, with the price-earning ratio of the Shanghai Composite Index standing at 12.25 on Nov 16, the newspaper said.
• The prices of new and second-hand houses in first-, second- and third-tier cities all suffered a month-on-month decline in October, the first comprehensive decline in the past eight years, Caixin reported. For new homes, prices in first-, second- and third-tier cities fell by 0.1%, 0.3% and 0.4% m/m, respectively. For second-hand housing, the falls were 0.3%, 0.5% and 0.5% m/m, respectively. Market expectations may improve as the recent supportive financing policies for property developers kick in, and demand may be revived as local governments lower the home purchase threshold and costs, Caixin said citing analysts.