China - PBOC, CIC, SAFE, NSSF, Central Huijin, NDRC etc.

[winston]

CICC: Reducing Need for Lower ST Open Mkt Operation Rates in CN by Policy Financial Tools

CICC wrote in a report that the market has been particularly concerned about the recent adjustment in policy rates.

The broker noted that investors who follow US interest rates are particularly concerned about inflation in terms of fundamental indicators, which is an important background indicator for interest rate adjustments.

In terms of market indicators, they are particularly concerned about the expectation of a rate cut implied by the interest rate futures market, which provides a precursor to the timing of a rate cut.

As for China's interest rates, CICC believed that nominal growth and asset prices are important background indicators for policy rate adjustments, while bill rates and derivatives quotes are important leading indicators.

However, given the diversity of China's monetary policy objectives, the focus of policy is different at different times, and the policy tools used are also different.

While the conditions are largely ripe for an internal interest rate cut, the recent release of policy financial instruments, as well as other interest rate reductions, have reduced the need for a general interest rate cut in the short term, such as a reduction in the policy rate.

CICC pointed out that to further track and judge the timing of the central bank's adjustment of the open market operating rate based on background indicators, it is also necessary to combine some of the market's prelude indicators, and that two types of indicators are worth paying attention to.

The first is the more sensitive capital market and credit market indicators, mainly referring to DR007 and bill rates.

The second category is derivatives quotes, which to a certain extent can gauge the market's expectation of policy rate adjustments.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

Head of CN NDRC Communicates with JD & Other Private Firms on Large-scale Equipment Renewal, Consumer Goods Replacement

Zheng Shanjie, head of the National Development and Reform Commission (NDRC) of China hosted the first thematic seminar for large-scale equipment renewal and consumer goods replacement this morning (2nd), conducting in-depth exchanges and discussions with the person in charge of private enterprises like JD Group, Midea Group, Haier Group and Gree Electric Appliances, on the next step in the implementation of the relevant work.

Related News - JPM: Improved CN Biz & Earnings Cycles Can Support CN Mkt; Div. Surprises from CHINA MOBILE, TENCENT, BYD & Others

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

China Central Bank keeps policy rate unchanged, drains cash from banking system

China's central bank on Monday left a key policy interest rate unchanged as widely expected when rolling over maturing medium-term loans and drained some cash from the banking system through the bond instrument.

Cooling inflation, slowing credit expansion and shrinking exports in March all pointed to the need for more stimulus to revive momentum in the world's second-largest economy, analysts said.

But a weakening yuan on the back of a resurgent U.S. dollar and yield differentials with other major economies constrained authorities' monetary-easing efforts.

With 170 billion yuan worth of MLF loans set to expire this month, the operation resulted in a net 70 billion yuan of fund withdrawal from the banking system.

Source: Reuters

https://www.thestandard.com.hk/breaking ... ing-system

[winston]

CN Social Security Fund Holds Historic High RMB427.5B Worth of Stock Positions at End-1Q

Citing data from Choice, Shanghai Securities News reported that as of the end of 1Q24, accounts related to the Social Security Fund appeared on the list of the top 10 outstanding shareholders of 667 listed companies, with a record-high total market value of RMB427.5 billion.

In terms of the latest shareholdings, the National Council for Social Security Fund directly held stakes in 7 listed companies during the period.

Among them, its holdings of ABC (01288.HK) (601288.SH) have the largest market value, with a market value of RMB99.5 billion at the end of the period.

Holdings of ABC (01288.HK) (601328.SH) and PICC GROUP (01339.HK) (601319.SH) ranked second and third with market values of RMB65.1 billion and RMB29.1 billion respectively.

In addition, its holdings of BANKCOMM (03328.HK) (601328.SH) reached RMB19.7 billion, holdings of Beijing Shanghai High-Speed Railway were RMB15.4 billion, and the holdings of FOUNDER SECURITIES (601901.SH) and GUOSEN SECURITIES (002736.SZ) were RMB8.9 billion and RMB3.8 billion respectively. The underlying stocks are all low-valuation value stocks.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

US holdings slip for China

China's stockpile of US Treasuries slid in March to the lowest level since 2009, while the total for all foreign holders saw an increase.

China's holdings - the most behind Japan's - fell by US$7.6 billion (HK$59.28 billion) to US$767.4 billion.

Starting with the February report, the Treasury began including details about how much the changes in a nation's long-term Treasuries holdings were due to movements in prices of the securities.

Total overseas holdings of US Treasuries rose by US$119.9 billion to US$8.09 trillion in March.

Japan's holdings rose by US$19.9 billion to US$1.19 trillion while the UK's holdings, the third largest, increased by US$26.8 billion to US$728.1 billion, an all-time high.

Benchmark 10-year Treasury yields fell by about five basis points in the month.

Source: The Standard

https://www.thestandard.com.hk/section- ... -for-China

[behappyalways]

This is one reason we haven't seen more aggressive rate cuts from the PBoC in China.
https://x.com/AyeshaTariq/status/1831293159214620950

[winston]

PBOC expected to cut rates and roll out more stimulus

Authorities yesterday announced that central bank governor Pan Gongsheng will hold a press conference on financial support for economic development, alongside National Financial Regulatory Administration Minister Li Yunze and China Securities Regulatory Commission Chairman Wu Qing.

Meanwhile, the National Development and Reform Commission said the two schemes to speed up trade-ins of large-scale equipment and consumer goods have gradually worked.

With funds totaling 300 billion yuan (HK$331 billion) from treasury bonds allocated, new energy vehicle retail sales climbed 17 percent in August from one month ago.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... e-stimulus

[winston]

PBOC halts bond buying to defend yuan as economic gloom worsens

The People’s Bank of China (PBOC) will suspend purchases of sovereign debt this month as the supply of the bonds has fallen short of demand.

Benchmark bond yields had slumped to an all-time low, driven by bets on aggressive policy easing to reignite a sluggish economy and demand for haven assets.

Bond investors have never been so bearish about the world’s second-largest economy, with some now piling into bets on a deflationary spiral.

Source: Bloomberg

https://www.businesstimes.com.sg/compan ... om-worsens

[winston]

CN NCSSF Shall Actively Play Role of Long-term Capital, Patient Capital to Help Stabilize Capital Mkt

China's National Council for Social Security Fund (NCSSF) should always be mindful of “National Priorities”, effectively integrate into major national strategies, actively play the role of long-term capital and patient capital, contribute to the stable operation of the capital market and promote the high-quality development of the economy and society, Liu Kun, Secretary of Party Committee of the NCSSF, presided over a caucus emphasizing.

The NCSSF should also coordinate the development and safety, and improve the risk prevention and control system with full coverage and full life cycle, so as to firmly guard the bottom line of the Fund's safety.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

China’s 4 golden flowers: how Beijing invests its US$3.2 trillion reserves

The State Administration of Foreign Exchange entrusts managers in four ‘overseas offices’ to diversify its reserves and maximise returns

The “four golden flowers”, as they are known in Chinese, refer to SAFE Investment Company in Hong Kong (Hua’an), the Investment Company of The People’s Republic of China (Singapore) (Huaxin), and similar units based in London (Hua’ou) and New York (Huamei).

A 2014 report published by China Forex, a SAFE-affiliated publication, described the four as part of the global layout of China’s foreign exchange reserves since the 1990s, exploring strategic investments in equities, emerging markets, and other sectors and assets.

Source: SCMP

https://www.scmp.com/business/banking-f ... 009e3b07b3