China Stocks fall as the yuan continues to weaken

Headline indices of the Mainland China equity market declined on Monday, 30 July 2018, following Wall Street's downbeat finish last week and as the yuan continued to weaken. Meanwhile, risk sentiments were also muted on caution ahead of a busy week of central bank meetings.Around late afternoon, the benchmark Shanghai Composite Index declined 0.16%, or 4.68 points, to 2,868.91, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 1.22% or 19.49 points, to 1,579.60. The blue-chip CSI300 index dropped 0.32%, or 11.31 points, to 3,509.92.

Global investors are closely looking on China's yuan after it suffered its longest weekly losing streak since November 2015. It hit a 13-month low at 6.8369 per dollar last week

Investors are also closely watching the Bank of Japan's two-day meeting starting Monday, with widespread speculation about whether the central bank may be looking to alter its ultra-loose monetary policy. The BoJ has engaged in massive bond-buying as part of a programme to push the country's inflation rate up to 2.0%, seen as necessary to turbo charge the world's third-largest economy.

The US Federal Reserve meets on Tuesday and Wednesday and is widely expected to stand pat while reaffirming the outlook for further gradual rate rises. The market is almost fully priced for a hike in September and leaning toward a further move before year-end.

Shares of Changsheng Biotechnology dropped 5% amid public outcry over a recent vaccine scandal. The pharmaceuticals company reportedly fabricated manufacturing and test records

NEWS FROM THE PRESS: Developers raise $2.6b in dollar bonds - Seven Chinese property developers have tapped Asia's dollar bond markets in the past week, raising a combined US$2.6 billion, as they race to take advantage of fresh investor enthusiasm for junk-rated bonds amid signs of economic support from the Chinese Government. On Thursday, Aoyuan Properties was seeking at least US$150 million while Greenland Holdings sought US$300 million. Agile Group Holdings was first out of the blocks with a July 20 offering of US$400 million, following on an initial offering of US$200 million the week earlier which struggled to drum up investor demand. Yuzhou Properties on Monday raised US$425 million, having received orders for US$1.5 billion of the bonds. The US$2.6 billion in deals have made the past week the busiest week since mid-June. On Wednesday, Sunac China Holdings raised US$400 million and Sino-Ocean Group Holding raised US$700 million. The previous day China Fortune Land Development sought US$200 million.

IMF outlook for China economy remains robust -- The International Monetary Fund said on Friday that China economy continues to perform strongly, with growth expected at 6.6% this year, a slightly slower rate than last year's 6.9%. The growth estimate was unchanged from the IMF's last forecast in May. The IMF raised its estimate for China's growth in 2018 in January after the economy unexpectedly accelerated last year. While the IMF praised China's progress on reducing financial sector risks and in further opening its economy, it said credit growth was still unsustainably high as some aspects of the country's rebalancing had slowed.

CURRENCY NEWS: Chinese yuan fell against greenback on Monday, after softer mid-point fixing by central bank. The People's Bank of China (PBOC) set official yuan midpoint at 6.8131, weakened 189 basis points than the previous fix of 6.7942 on Friday. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2% from the central parity rate each trading day.

Powered by Capital Market - Live News