The China Securities Regulatory Commission is tightening rules on short selling and high-frequency trades in a bid to crack down on improper arbitrage and maintain market stability, Bloomberg News reported. The market watchdog approved the mainland stock exchanges to boost margin requirements in short selling, starting July 22. Meanwhile, China Securities Finance Corp., the country’s biggest stocks lending provider, will suspend its business of lending securities to brokerages starting July 11, with outstanding contracts to be settled by the end of September, the CSRC added.
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China Vanke Co. warned that losses grew substantially in the second quarter, with the big homebuilder saying that investment in some projects “has been over-optimistic,” Bloomberg News reported. The firm, whose woes this year have been emblematic of the ongoing slump in China’s property sector, said in a Hong Kong stock exchange filing that it expects to post a first-half loss of 7 billion yuan (US$962 million) to 9 billion yuan. That signals a sharp downturn from the first quarter, when it reported a 362 million yuan loss. “The company deeply apologises for the performance loss,” it said.
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A solar panel maker in Georgia that has booked $230 million in federal tax credits stands to collect hundreds of millions more as it pursues plans to create the first end-to-end solar manufacturing chain in the US, easing reliance on China and related concerns about the use of forced labor, Bloomberg News reported. But at least through the end of this year, the Qcells solar plant, which South Korea’s Hanwha Solutions Corp. opened in Dalton, Georgia, in 2019 and almost doubled in capacity last year, is making panels with base components from China.
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China’s central bank has signed agreements with major brokers to borrow “hundreds of billions” of yuan worth of government bonds, a move analysts say is likely aimed at stabilizing plummeting long-term bond yields, the Wall Street Journal reported. The People’s Bank of China has started to borrow medium and long-term notes from lenders, state media said Friday, now holds “hundreds of billions” of yuan worth of bonds. The central bank will borrow the bonds with no fixed term on an open-ended basis and sell them depending on market conditions, state media added.
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China's central bank said on Monday it would start conducting temporary bond repurchase agreements or reverse repos to make open market operations more efficient and keep banking system liquidity ample, Reuters reported. Market participants and analysts believe the move paves the way for a new interest rate corridor, with the seven-day reverse repo rate serving as a central guide, giving the bank more leeway to manage cash conditions and interest rates amid hot demand for bonds.
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Four months ago, China’s leaders announced what seemed like a straightforward and proven plan to recharge the economy: Subsidize consumers who want to replace old cars and household appliances, the New York Times reported. The early results are not promising. Only 113,000 cars qualified for trade-in subsidies through June 25 — a blip in a country where monthly sales exceed 2 million cars. And buyers of new appliances such as washing machines and refrigerators are being offered discounts of only about 10 percent, depending on what city they live in.
China’s central bank’s plan to borrow bonds may slow but won’t quash their rally, as the fundamental reasons driving demand for debt are unlikely to reverse, according to analysts, Bloomberg reported. The impact of the People’s Bank of China move may instead be to put a floor on yields and send them into a range, they said. Benchmark yields rebounded from a record low Monday after the PBOC said it would borrow government bonds from primary dealers, a sign it may be contemplating selling securities to cool down a hot bond market.
China’s capital city of Beijing eased homebuying requirements for downpayment and mortgages, joining the country’s other mega cities to support the real estate sector, Bloomberg News reported. Beijing reduced downpayment requirements by 10 percentage points to a minimum of 20% for first-time buyers, the capital city said in a statement Wednesday. For second homes, the threshold is lowered to a minimum of 35% for urban areas and a minimum of 30% elsewhere. The city also lowered floor on mortgage rates.
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A liquidation case against Chinese property developer Shimao Group has been adjourned to July 31 as it has again extended a deadline for creditors in relation to a debt restructuring plan, the company said in a filing on Wednesday, Reuters reported. The adjournment was made by a Hong Kong court following a consensual application for such a move by Shimao and the petitioner - state-owned lender China Construction Bank (Asia) - the filing to the Hong Kong Stock Exchange said.
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China discovered that officials allowed cash raised from special bonds or funds from the central government budget to be invested in subpar or halted projects, raising questions about the effectiveness of current fiscal measures in bolstering economic recovery, Bloomberg News reported. Almost 28 billion yuan ($3.9 billion) of bond funds involving 522 projects were untapped or used for purposes other than what they were approved for as of the end of 2023, the National Audit Office said in a statement released Tuesday.
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