China Market ends softer

The Mainland China equity market closed mixed on Tuesday, 20 August 2019, weighed down by financials and property developers stocks, offsetting gains in electronics stocks after temporary suspension of a ban Huawei and its suppliers. At closing bell, the benchmark Shanghai Composite Index declined 0.11%, or 3.09 points, to 2,880. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.14%, or 2.15 points, to 1,574.12. The blue-chip CSI300 index shed 0.09%, or 3.36 points, to 3,787.73.

Shares of mainland Chinese banks declined, amid concern that the central bank's reform of the loan prime rate would squeeze lenders' interest rate margins and erode their profits. Property developers also suffered amid a gloomy outlook for housing prices in the city. The People's Bank of China (PBOC) debuted its new loan prime rates (LPR) under a new mechanism that was unveiled over the weekend. The new 1-year LPR was set at 4.25%, as compared to 4.31% previously. The 5-year LPR was at 4.85%. Shares of Industrial and Commercial Bank of China (601398 CH) fell by as much as 1.1%.China Construction Bank (601939 CH) fell as much as 1.3% to 6.98 yuan.

Stocks related to television broadcasting advanced, after China's top media regulator released a new guideline to promote the development of radio and television broadcasting industries on Monday. The National Radio and Television Administration said it would accelerate the development of 5G broadcasting networks and the application of ultra-high-definition television broadcasting. The goal is for the broadcasting industry to produce more and better content that can both satisfy the need of the new era, as termed by President Xi Jinping, and cater to market demand by 2025, according to the policy. Shenzhen Topway Video Communication (002238 SZ), which is in the business of television data transmission, jumped by the 10% limit to 8.71 yuan.

CURRENCY NEWS: The yuan eased against greenback on Tuesday, tracking broad strength in the dollar which firmed on hopes that growth boosting measures in Germany and China would ease the risk of a global recession. The spot rate opened at 7.0600 per dollar and was changing hands at 7.0681 at midday, 172 pips weaker than the previous late session close.

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