November 29, 2022 01:34 GMT
MNI China Press Digest Nov 29: Yuan, Real Estate, Pensions
MNI summarises the key stories from the Chinese press.
The following lists highlights from Chinese press reports on Tuesday:
- The yuan is expected to maintain its stable two-way movement as the Chinese economy continue to improve, while a possibly lower U.S. Dollar Index and weaker U.S. economic performance next year will help yuan regain the seven level against the dollar, 21st Century Business Herald reported citing analysts. Though some speculators short sold the yuan after the People’s Bank of China cut banks’ reserve requirement ratio last Friday, the offshore yuan regained lost ground to strengthen above 7.2 against the dollar on Monday, as the China-U.S. interest rate spread narrowed to 78bp despite the RRR cut, the newspaper said. Many emerging market investment funds believe that the RRR cut will help stabilise the economy and the yuan has been underestimated, the newspaper said citing an unnamed private equity fund manager in Hong Kong.
- China will allow qualified property developers to restructure with listed companies in the real estate sector, and these listed companies are allowed to issue shares or pay cash to purchase property assets, in a bid to support developers' ability to refinance, Yicai.com reported citing a statement on the website of China Securities Regulatory Commission. CSRC had suspended approval for restructuring and refinancing by developers since 2010 and the relaxation of these conditions will be a great boon, the newspaper said citing analysts. Funds raised should be used to replenish cash flow and for debt repayment, rather than land acquisition or developing new housing projects, the statement said. Listed real estate companies can also refinance in a non-public manner, with funds raised to be used in ensuring the delivery of unfinished housing projects, the statement added.
- China's recently launched individual pension system will help transform its financial markets by developing long term investment products and management skills, according to Dong Dengxin, Director of the Institute of Financial Securities, writing for the 21st Century Business Herald late on Monday. He noted that allowing different types of financial institutions to offer pension products will promote competition needed to develop the market rapidly. China’s financial markets have been characterised by short term and speculative investing, and the development of pension products provides an opportunity to develop a longer term investment culture. The scheme will be piloted in the 36 cities before being introduced nationwide.