China Market gains 0.4%

The Mainland China share market finished session higher on Tuesday, 28 December 2021, as risk sentiments lifted by liquidity injection the People's Bank of China and as authorities unveiled sweeping regulations governing overseas share sales by the country's firms.

At close of trade, the benchmark Shanghai Composite Index added 0.39%, or 14.14 points, to 3,630.11. The Shenzhen Composite Index, which tracks stocks on China's second exchange, rose 0.83%, or 20.61 points, to 2,514.82. The blue-chip CSI300 index inclined 0.74%, or 36.64 points, to 4,955.96.

China boosted its injection of short-term cash into the banking system to the highest in two months, as demand for liquidity climbed before year-end. The People's Bank of China (PBOC) added 200 billion yuan (S$42.5 billion) of cash into the financial system through 7-day reverse repurchase agreements, more than offsetting the 10 billion yuan coming due. The move came after an indicator for short-term borrowing costs soared the most in a year on Monday (Dec 27), a sign of liquidity shortages in the interbank market. Liquidity conditions in China tend to tighten toward the end of the year, as banks hoard cash to prepare for regulatory checks. The PBOC reduced the reserve-requirement ratio earlier this month in an effort to keep cash supply ample and support the nation's economic recovery from the pandemic. In its quarterly meeting, PBOC pledged to use monetary policy tools more "proactively" to support growth. The 7-day repo rate fell 15 basis points to 2.27 per cent, after soaring 52 basis points on Monday.

 

China has unveiled sweeping regulations governing overseas share sales by the country's firms, taking one of its biggest steps to tighten scrutiny on international debuts in the wake of Didi Global Inc.'s controversial listing. The regulations, issued by the country's securities watchdog, commerce ministry and top economic planning agency over the past week, cast more uncertainty over the prospects for overseas initial public offerings that had proceeded virtually unchecked for two decades.

CURRENCY NEWS: China's yuan was little changed against the U.S. dollar on Tuesday despite softer mid-point fixing by the central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.3728 per dollar, 0.07% softer than the previous fix of 6.3686. In the spot market, the onshore yuan CNY=CFXS was changing hands at 6.3723 around late afternoon, 0.01% stronger than the previous late session close.

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