Caixin
Jul 10, 2020 11:17 PM
CHINA BUSINESS DIGEST

China Business Digest: Yuan Strengthens Past 7 per Dollar; China Points to Shrimp as Virus Carrier

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China’s yuan strengthens past the psychologically significant 7 per dollar level for the first time since March. The nation’s June credit growth accelerates after the central bank’s initiatives to loosen monetary conditions. China finds Covid-19 virus on packaging of shrimp imported from Ecuador. Meanwhile in Hong Kong, investors are lighting up shares of leading e-cigarette maker Smoore International in its trading debut.

By Tang Ziyi (ziyitang@caixin.com)

** TOP STORIES OF THE DAY

Yuan strengthens past 7 per dollar for first time since March

The onshore yuan on Friday strengthened past the psychologically significant exchange rate of 7 per dollar for the first time since March 12, with its daily reference rate hitting 6.9943 against the greenback, official data showed.

The yuan’s appreciation indicates investor confidence in China’s economy is recovering from the coronavirus pandemic, which is continuing to rage in other countries like the U.S., analysts said.

China’s credit growth accelerated in June

China’s total social financing, a broad measure of credit and liquidity in the economy, grew by a net 3.43 trillion yuan ($490.5 billion) in June, compared with a net increase of 3.19 trillion yuan the previous month, central bank data showed Friday. This was higher than the median estimate of 2.9 trillion yuan in a Caixin survey of economists.

Banks issued 1.81 trillion yuan worth of new loans in June, slightly higher than the survey estimate of 1.8 trillion yuan. The central bank has stepped up efforts to loosen monetary conditions to help the economy recover from the coronavirus pandemic.

China points to imported shrimp as virus carrier

China said samples of imported shrimp tested positive for the coronavirus, raising questions again over whether the pathogen can spread through food or frozen products. Testing found the Covid-19 pathogen on the inside and outside of packaging of shrimp from three Ecuadorian plants, and imports from those processors will be halted, China’s General Administration of Customs said.

Central bank may extend compliance deadline for new WMP rules

China’s central bank is discussing extending a grace period for financial institutions to comply with sweeping new asset management rules issued in 2018 and set to take effect in December, officials said Friday at a press conference. Due to the impact of the pandemic, China’s economy is under downturn pressure, increasing the difficulty of revamping wealth management products (WMPs), said Sun Tianqi, head of the financial stability bureau of People’s Bank of China.

GF Securities punished for helping in Kangmei’s fraud

GF Securities Co. Ltd. was banned from the securities-sponsor business for six months and from bond underwriting for a year over its role in the $12.6 billion financial fraud of drugmaker Kangmei Pharmaceutical Co. Ltd., the China Securities Regulatory Commission (CSRC) said Friday in a statement.

Smoore IPO soars on Hong Kong trading debut

Shares of Smoore International Holdings Ltd., one of the world’s largest makers of e-cigarettes, opened up 125% Friday in their Hong Kong trading debut. The company raised HK$7.1 billion ($916 million) in its IPO.

Chinese brokerages benefit from stock market rally

China’s securities brokerages posted sharp profit gains last month, fueled by the A-share market rally. Thirty-six listed brokerages that released June results reported combined revenue of 28.7 billion yuan, up 86% from May. Net profits grew 78% month-on-month to 11.3 billion yuan.

China grants first license for a privately owned refiner to export oil products

Zhejiang Petroleum & Chemical Co. Ltd. has won approval to export refined oil products, becoming China’s first privately owned refiner (link in Chinese) to gain such permission, according to a Tuesday document released by the Ministry of Commerce that was seen by Caixin. The move is aimed at finding new markets to reduce the sector’s excess capacity, an energy industry analyst said.

Digest Stock Chart 0710

** OTHER STORIES MAKING THE HEADLINES

• Multilateral lender New Development Bank said Tuesday it issued a 2 billion yuan bond in China’s interbank bond market. The bond was oversubscribed by 2.1 times.

•Chinese electric car startup Nio Inc. announced Friday it had obtained a 10.4 billion yuan credit facility from six domestic banks.

• China’s aviation industry reported losses of 34.3 billion yuan in the second quarter of this year, narrowing by 3.9 billion yuan from losses in the first quarter, the civil aviation regulator said (link in Chinese) Friday.

China Bohai Bank Co. Ltd. has reportedly raised $1.78 billion in its Hong Kong IPO after pricing its shares at HK$4.80. (Reuters)

• Chinese video streaming platform Bilibili Inc. on Friday failed to launch its first remote sensing satellite.

• Shares of Hong Kong-listed baby formula producer China Feihe Ltd. bounced back after the company on Wednesday denied allegations that included exaggerating sales made by short seller Blue Orca Capital LLC.

• Creditors of 10 subsidiaries of debt-burdened carmaker Lifan Industry Group Co. Ltd. have filed with a Chongqing court to have the companies pulled into bankruptcy reorganization.

** ON THE CORONAVIRUS

• Hong Kong reported 42 new Covid-19 cases on Thursday, of which 34 were locally transmitted, marking the second consecutive day that local infections jumped in the city. The city government will ban restaurants from running at more than 60% capacity starting Saturday, saying that a maximum of eight people will be allowed per table.

• On Thursday, the Chinese mainland reported four new symptomatic Covid-19 cases (link in Chinese), all imported, according to China’s top health body. Beijing reported (link in Chinese) no new symptomatic cases for the fourth straight day.

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Caixin’s coverage of the new coronavirus

• The General Administration of Sport of China has announced (link in Chinese) that, except for the 2022 Winter Olympics, no major new sporting events will proceed as planned, for now.

• As of Friday afternoon in Beijing, the number of coronavirus infections globally exceeded 12.2 million, with the death toll passing 555,000, according to data compiled by Johns Hopkins University.

** LOOKING AHEAD

July 14: Release of China’s import and export data

July 16: Release of China’s investment, retail sales and industrial output data

** AND FINALLY

Singapore held its general election Friday against the backdrop of the Covid-19 pandemic. Voters were given timed voting slots to cast their ballots on polling day, the Straits Times reported. They were also required to sanitize their hands and wear gloves before receiving ballot papers.

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Yang Ge (geyang@caixin.com)

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