MNI China Press Digest Oct 29: Yuan, A-shares, PBOC

MNI (BEIJING) - Highlights from Chinese press reports on Wednesday:

• The yuan is expected to remain relatively strong against the U.S. dollar in the near term, but any appreciation may be limited given the dollar's resilience as the currency has already fallen sharply in the first half of the year and the market has partly priced in potential Fed rate cuts, Securities Daily reported citing Wang Qing, analyst with Golden Credit Rating. China’s economic fundamentals continue to play a major role in supporting the yuan, while the pent-up demand for foreign exchange settlement from customers may be released as the currency appreciates, said Ming Ming, chief economist of CITIC Securities, noting the central bank has sufficient policy reserves to stabilise the exchange rate.
• The Shanghai Composite Index broke through 4,000 points briefly during Tuesday's trading session, returning to this handle for the first time since Aug 19, 2015, 21st Century Business Herald reported. The Index has risen by 18.99% so far this year, with the electronics sector nearly doubling by rising 98.01%, the newspaper said. Though A-shares recently saw transaction volume shrinking with increased volatility, there still are trading opportunities in low-priced targets in the directions of computing power and robots, the newspaper said citing analysts from Huatai Securities.
• The People’s Bank of China will focus on deepening the reform of the modern central banking system and further improving the efficiency of monetary policy transmission in the next five years, Shanghai Securities News reported citing analysts following the release of the Proposal of the Party's Central Committee on the formulation of the 15th Five-Year Plan. Meanwhile, the Bank’s intension to build a "comprehensive macro-prudential management system" should focus on key areas such as systemically important financial institutions and cross-border capital flows, by improving risk monitoring and early warning and smoothening market fluctuations through counter-cyclical adjustments, the newspaper said.