6/12/2021 Financial News: RMB Against US Dollar Closed Slightly Down, Stock Market Closed Down On Weekly Basis

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1.The RMB Against The Us Dollar Closed Slightly Down On Friday

The RMB against the US dollar closed slightly down on Friday, while the central parity rose to a new high in more than a week.  Traders said that the RMB turned from rising to falling at the end of the trading session; there is a lack of more information to guide the RMB to remain stable in the short term, and pay attention to the Fed’s interest rate meeting next week. A foreign bank trader also said that there is no reason for the dollar to strengthen in the short term; the Chinese regulators’ attitude towards the RMB is also clear, and coupled with the demand for dividend purchases, it is estimated that the RMB will fluctuate within the range.

2.China’s Stock Market Closed Down, Dragged Down By Liquor And Financial Sectors

China’s stock market closed down on Friday, dragged down by liquor and financial stocks. It closed down for the second consecutive week this week; today’s data shows that China’s overall credit growth slowed in May. The CSI300 index (The Shanghai and Shenzhen 300) closed down 0.89%, and the SSEC index (Shanghai Composite Index) closed down 0.58% to 3,589.75 points.  The China Securities Liquor Index fell 3.3% due to continued concerns about high valuations. The Shanghai and Shenzhen 300 Financial Real Estate Index fell 1.1%. This week the Shanghai and Shenzhen 300 Index fell 1.1%, while the Shanghai Composite Index fell 0.1%.  Many analysts and traders said that the stock market lacks strong upward momentum due to the fact that the regulatory layer is expected to maintain stable liquidity and tighten monetary policy stance.

3.Didi Applies For Listing In The U.S.

Didi Chuxing, a Chinese online ride-hailing company, has published a document applying for a public listing in the United States, which shows the financial losses to its business caused by the epidemic last year and the strength of its rebound so far this year.  This will start one of the largest foreign companies going public in the United States in 2021. According to a person familiar with the matter, in a 2018 round of financing, private investors valued Didi at $65 billion, and the company may seek a higher valuation in this public offering.  Depending on investor response, the scale of Didi’s listing will be comparable to the initial public offering (IPO) of South Korean e-commerce company Coupang earlier this year.  Coupang’s listing is the largest IPO of a foreign company in the United States since Alibaba went public in 2014.

4.China Evergrande Claims That It Has Ample Liquidity And No Debt Risk

Regarding the inclusion on the credit rating watch list by China Chengxin Credit Rating Group, Evergrande Group announced on Friday that its production and operation are all normal, with sufficient liquidity, strong anti-risk ability, and no debt risk. The announcement also pointed out that the above-mentioned rating matters will not have a significant adverse impact on its solvency, nor will it have a significant impact on the suitability management of relevant investors and the qualification of bond pledge repurchase. According to the announcement, China Evergrande’s interest-bearing liabilities fell from 874.3 billion yuan to 674 billion yuan.

5.Wechat And Alipay Participate In The Issuance And Circulation Of Digital RMB

Mu Changchun, director of the Digital Currency Research Institute of the People’s Bank of China, once again emphasized on Friday that third-party payments such as WeChat and Alipay will continue to function as wallets or as financial infrastructure, participating in the issuance, circulation and exchange of digital RMB. When he responded to the issue of the relationship between digital RMB and third-party payment on the Lujiazui forum, he pointed out that RMB is money and payment tool, and wallet is the carrier and infrastructure.  “The same is true for third-party payment, that is, its function as a carrier or infrastructure has not changed, and it can still be used as a carrier and infrastructure for digital RMB.” He said.

6.BlackRock Obtains Approval To Conduct Mutual Fund Business In Communist China

BlackRock Inc. (BLK) has been approved by the Chinese regulatory authorities to become one of the first foreign investment companies to conduct wholly-owned public fund business in Communist China.  Faced with Communist China’s booming financial industry, BlackRock has formulated ambitious business development plans.  BlackRock Fund Management Co. Ltd. said on Friday that the China Securities Regulatory Commission has approved the company to start operations as a fund management company. The fund management company was established by BlackRock in August 2020. With the latest approval from the Chinese government, BlackRock will be able to provide domestic investment products to the Chinese retail army.  For a long time before this, BlackRock has been barred from independent entry into this huge market.

7.New Regulations On Communist China’s Seven Trillion Cash Wealth Management Products

New regulations for cash wealth management products with a scale of more than 7 trillion  RMB have been implemented in Communist China.  The Central Bank of China and the China Banking and Insurance Regulatory Commission issued the “Notice on Regulating the Management of Cash Management Financial Products” on Friday.  Regulations require that the leverage level of each cash management product should not exceed 120%, except in the event of huge redemptions.  If the product is accounted for by the amortized cost method, the risk control method of shadow pricing should be adopted. There are two main adjustments to the new regulations: One is to delay the transition period deadline to the end of 2022. The second is to adjust the proportion of each cash management product invested in bank deposits and interbank certificates of deposit of the same commercial bank with a credit rating of AAA to the net asset value of the product from “the total shall not exceed 10%” to “20%”.

8.Communist China’s Apples Are Experiencing Sales Difficulties

A fruit grower in Baishui County, Shaanxi Province, the “Hometown of Apples in Communist China,” said that the production of apples varies from year to year due to natural disasters, diseases and insect pests, but sales are relatively stable.  The annual apple sales volume of Shengyuan Fruit has been stable at around 30 million catties for a long time. Generally, it is necessary to complete the storage and clearing of the apples stored in the previous year by the end of May, and reserve enough storage capacity for early-maturing varieties such as Gala apples that will begin soon.  But as of this year, 30% of apples are stored in air-conditioned cold storage. Since last winter, the price has dropped significantly: from 1.7 yuan a catty at the time of sale to 0.4 yuan now, no one has come to ask for the price.

By【G Translators – Financial Team】
Author: 雪梨Cheli

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