MNI China Press Digest Dec 6: RRR Cut, Evergrande, US Listing

The following lists highlights from Chinese press reports on Monday:

• The People’s Bank of China may cut banks’ reserve requirement ratios as early as mid-December to promote credit expansion and better support the economy, China Securities Journal reported following Premier Li Keqiang’s speech on Friday calling for an RRR cut in due course. About CNY950 billion medium-term lending facilities are maturing on Dec. 15, which may be the window for RRR cut, the newspaper said citing analysts. The cut is likely to be 50-bps to roll over part of the maturing MLF, so to help reduce banks’ debt cost and avoid excessive liquidity, the newspaper said citing Wang Yifeng, chief banking analyst of China Everbright Securities.
• China’s real estate market may become more stable with market sentiment normalizing as the impact of the Evergrande risks become clearer, and developers will enjoy smoother financing channels amid policy correction, the PBOC-run newspaper Financial News reported citing analysts. Some Chinese developers have begun to repurchase overseas bonds, and some investors have also begun to buy dollar bonds issued by Chinese developers as domestic home sales, land purchases and financing of developers normalize, according to a statement on the PBOC’s website Friday responding to possible Evergrande defaults on its dollar bonds. Loans to developers continue to rise in November based on the sharp rebound in October, and domestic real estate bond issuance also rose 84% from the previous month, the newspaper said, noting that the pessimism on real estate has been relieved as financing policy eased.
• China’s securities regulator said it is open to companies choosing to be listed in the U.S. and a few companies are actively working with regulators for U.S. listings. Reports that the Chinese authorities are forbidding those so-called variable interest entities (VIE) seeking U.S. listings are untrue, the China Securities Regulatory Commission said in a statement on Sunday. The reports came after a new U.S. SEC law forced some Chinese companies to delist from the U.S. These practices are by some U.S. political forces and shouldn’t be a responsible policy choice, said the Chinese watchdog.