Glat&Taggart Published Stock Market Weekly Updates For Japan. According to the document, China’s stock markets posted mixed returns after Premier Li Keqiang tempered expectations of excessive stimulus and indicated flexibility on China’s annual growth target. The broad, capitalization-weighted Shanghai Composite Index added 1.3% and the blue chip CSI 300 Index, which tracks the largest listed companies in Shanghai and Shenzhen, dipped 0.2%, Reuters reported.
At a meeting of global business leaders hosted by the World Economic Forum, Li said that as long as employment is relatively sufficient, household income grows, and prices are stable, slightly higher or lower growth rates are both acceptable. China issued a growth target of about 5.5% for 2022 at a Politburo meeting in April, but many economists believe that Beijing will have a hard time meeting its goal.
The China Banking and Insurance Regulatory Commission asked lenders to provide credit to eligible developers so they can complete halted projects as a growing number of homebuyers across China threatened to stop making mortgage payments on unfinished projects.
The mortgage boycott movement erupted in June and spread to at least 320 projects nationwide and affects loans worth as much as CNY 2 trillion (USD 296 billion), according to Bloomberg. Even as some banks said they are considering giving homeowners a grace period on payments, suppliers to the property sector have joined the boycott.
The People’s Bank of China maintained interest rates as expected, keeping the one-year loan prime rate (LPR) unchanged at 3.70% and the five-year rate at 4.45%. The LPR is a lending reference rate set monthly by 18 banks and announced by the central bank. Banks use the five-year LPR to price mortgages, while most other loans are based on the one-year rate.
In corporate news, London-based lender HSBC became the first foreign bank to set up a Chinese Communist Party committee in its investment banking subsidiary in the country, the Financial Times reported, a move that could pressure other foreign banks to follow suit.
HSBC said in a statement that such branches “are common and can be set up by as few as three employees,” but that they would have no influence on the business nor formal role in its day-to-day activities.
On the regulatory front, China’s cybersecurity regulator fined Didi Global CNY 8 billion (USD 1.2 billion), potentially signaling an end to the government’s crackdown on the ride-hailing app and clearing a path for a public listing in Hong Kong. Didi was one of the most high-profile targets of Beijing’s clampdown on the country’s internet industry starting in 2020, when regulators unexpectedly canceled the initial public offering of Ant Group.
The yuan currency eased to CNY 6.764 per U.S. dollar from last week’s CNY 6.75, Reuters data showed. The 10-year Chinese government bond yield was flat, according to Dow Jones. Outflows from China’s bond markets totaled USD 14 billion in June as surging U.S. Treasury yields reduced the relative attractiveness of Chinese bonds.
