MNI China Daily Summary: Monday, March 31

POLICY: The People’s Bank of China paused treasury trading for the third consecutive month in March while continued outright reverse repurchase operations to inject liquidity into interbank market, according to statements on the Bank’s website.

POLICY: China's Manufacturing Purchasing Managers Index rose by 0.3 points to 50.5 in March, staying above the breakeven 50 mark for the second month to hit the highest level since April 2024, as manufacturers accelerated production and as the holiday effect faded, data from the National Bureau of Statistics showed.

POLICY: China’s steel industry PMI reached 46% in March, up 0.9 percentage points from February, marking the second month of improvement but below the expansion mark of 50, the China Logistics Information Centre announced.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY166.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY31.7 billion after offsetting the maturity of CNY135 billion today, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.1888% from 2.0509%, Wind Information showed. The overnight repo average increased to 1.8038% from 1.7195%.

YUAN: The currency strengthened to 7.2516 against the dollar from the previous 7.2637. The PBOC set the dollar-yuan central parity rate higher at 7.1782, compared with 7.1752 set on Friday. The fixing was estimated at 7.2644 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.8100%, down from the previous close of 1.8200%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged down 0.46% to 3,335.75 while the CSI300 index decreased 0.71% to 3,887.31. The Hang Seng Index fell 1.31% to 23,119.58.

FROM THE PRESS: New home transactions will continue to recover moderately in Q2, with positive y/y and q/q growth, Securities Times reported, citing Yang Kewei, deputy general manager at the China Real Estate Information Corporation. Second-hand housing transactions will improve and increase market share, said Yang. A series of measures to boost consumption and stabilise asset prices will strengthen the positive correlation between rising new property prices and the second-hand market, Yang added.
 

China’s four major state-owned banks announced plans on Sunday to raise up to CNY520 billion via A-share placements to boost core tier-one capital, Shanghai Securities News reported. The Ministry of Finance will subscribe to CNY500 billion, with the remainder allocated to other state-owned entities, the newspaper noted. The plan includes Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China, raising CNY165 billion, CNY105 billion, CNY120 billion and CNY130 billion, the newspaper said.

Trade and economic representatives from China, Republic of Korea and Japan have agreed to strengthen cooperation under regional and multilateral frameworks such as the World Trade Organization and Regional Comprehensive Economic Partnership Agreement, as well as discuss accelerating negotiations on the China-Japan-ROK Free Trade Agreement, 21st Century Business Herald has reported. Commerce Minister Wang Wentao, said the three nations should jointly safeguard free trade and the multilateral trading system, oppose unilateralism and protectionism and continue to promote regional economic integration.