MNI China Daily Summary: Tuesday, August 19

EXCLUSIVE: China's Loan Prime Rate is likely to remain unchanged in August as the People’s Bank of China continues to emphasise targeted facilities to support weak sectors in a bid to counter economic headwinds and deflation risks.

POLICY: China’s urban unemployment rate for 16-24 year olds reached 17.8% in July, up from 14.5% in June, the highest reading in 12 months, National Bureau of Statistics data showed.

LIQUIDITY: The People's Bank of China (PBOC) conducted CNY580.3 billion via 7-day reverse repos, with the rate unchanged at 1.40%. The operation led to a net injection of CNY465.7 billion after offsetting maturities of CNY114.6 billion, according to Wind Information.

RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) increased to 1.5452% from 1.5144%, Wind Information showed. The overnight repo average edged up to 1.4715% from 1.4489%.

YUAN: The currency weakened to 7.1820 against the dollar from the previous 7.1792. The PBOC set the dollar-yuan central parity rate higher at 7.1359, compared with 7.1322  on Monday. The fixing was estimated at 7.1866 by Bloomberg survey today.

BONDS: The yield on 10-year China Government Bonds was last at 1.7675%, up from the previous close of 1.7325%, according to chinamoney.com.cn.

STOCKS: The Shanghai Composite Index edged down 0.02% to 3,727.29, while the CSI300 index was down 0.38% at 4,223.37. The Hang Seng Index lost 0.21% at 25,122.90.

FROM THE PRESS: China’s new-energy heavy truck sales reached 16,200 units in July, up 185% y/y, according to data from the Heavy Truck Beidou Operation Network. From January to July, cumulative sales totalled 82,200 units, up 191% year-on-year. Industry experts attributed the increase to national policy support, advances in product technology, improved cost competitiveness and new model launches. Pure electric heavy trucks now account for over 90% of total sales in China’s new energy heavy truck market, said Cai Zilin, chief analyst at Wanlian Securities, in an interview with Securities Daily.

China must expand the momentum of economic recovery while striving to meet its annual economic and social development targets, Premier Li Qiang emphasised at the ninth plenary meeting of the State Council. Li underscored the need to bolster confidence and recognise risks and challenges facing the economy, including a severe external environment. He called for greater efforts to stabilise employment, safeguard livelihoods, enhance disaster prevention and strengthen safety and production oversight to ensure overall social stability. (Source: Yicai)

Local governments must fully implement housing sector policies to promote supply-demand balance, stabilise prices and restore market confidence, as recent data shows the market remains in a deep adjustment phase, according to Yan Yuejin, Deputy Director of the E-House China R&D Institute in Shanghai. Yan emphasised that authorities must further intensify policy efforts, particularly in reducing home-buying costs and stimulating demand release.