MNI China Press Digest Nov 28:Shares, Debt, Industrial Profits

Highlights from Chinese press reports on Thursday:

• A total of 161 companies received CNY37.39 billion in support from the central bank’s CNY300 billion re-lending facility to help listed firms and major shareholders buy back or increase shares as of Nov 27, China Securities Journal reported. The facility was expected to provide long-term funds for the stock market and increase investor confidence by boosting stock prices, however share prices fundamentally depend on the profitability of listed companies, the newspaper said, citing analysts.
• China’s central government plans to balance the implementation of CNY10 trillion bonds to alleviate local government debt over three-to-five years was at odds with the economy’s need for greater short-term relief, according to Lian Ping, chairman of the China Chief Economist Forum. Lian argued authorities should front load measures in year one and two to ease debt pressure, improve liquidity conditions and promote regional investment and consumption growth, Lian added.
• China saw industrial profits down 10% y/y in October, improving 17.1 percentage points from September, with decline of large, medium and small enterprises narrowing by 27.1 pp, 4.6 pp and 1.5 pp y/y. Wen Bin, chief economist at Minsheng Bank, said the data showed the recent package of incremental and stock policies had boosted domestic demand. Looking ahead, Zhou Maohua, a macro researcher at Everbright Bank said policies to promote consumption and stabilise the property market will gradually form a virtuous circle between market demand and industrial supply.