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Express News | Agricultural Bank of China: Continuous improvement in business operations quality and efficiency in the first half of the year, taking solid steps towards high-quality development.
China's 'Big Four' Banks Cut Interest Rates
China: Consumer goods in the Mainland could lead to GDP growth by 0.3 percentage points, or increase household appliance sales by 15%
China's Ministry of Finance issued a notice on “Certain Measures to Support Large-Scale Equipment Upgrades and Replacement of Consumer Goods” by the National Development Reform Commission and the Ministry of Finance. Proposed the coordination of around RMB 300 billion (below) in ultra-long term special government debt financing, and strongly supported large-scale equipment upgrades and the replacement of old consumer goods. This indicates a further decline in positive fiscal policy, which the Bank expects could drag down GDP growth by around 0.3 percentage points.
Morgan Stanley: Focus on managing net interest spread as internal banks confirm lowered deposit rates.
JPMorgan released a report stating that the announcement by six large state-owned banks of a reduction of deposit interest rates on the previous day (25th) was not unexpected, based on earlier media reports. The bank reiterated its positive view on China mainland banking, based on the narrowing net interest margin gap of two basis points resulting from the reduction of deposit interest rates and loan market quote rates (LPR), which is estimated to increase the bank's earnings by 2% next year. The rapid reduction of deposit interest rates also confirms the bank's view that regulatory authorities and banks are more focused on stabilizing the net interest margin. The bank believes that future interest rate cuts will be symmetrical, and the reduction of deposit interest rates will be accompanied by a reduction in LPR. The bank also noted that regulatory authorities are cracking down on banks' artificial intervention in interest rates, including deposits.
The stock banking sector has adjusted, with Agricultural Bank of China and Bank of Communications falling more than 2%.
On July 26, Agriculatural Bank Of China and Bank of Communications both fell more than 2%, while Industrial and Commercial Bank of China, China Construction Bank Corporation, Shanghai Pudong Development Bank, Bank of Nanjing and other stocks also fell.
Government bond futures hit a new historic high yesterday. Analysis suggests the fundamental aspects of the market still support a further decline in bond yields.
According to a report from the Shanghai Securities News, the national bond futures hit a new historic high following the news of a state-owned bank lowering deposit rates and the central bank lowering MLF operational rates by 20 basis points. Yesterday (25th), the main contract for the 30-year national bond futures rose by 0.4%, setting a new closing high, while the main contract for the 10-year national bond futures fell slightly but still reached a historic high during the trading day. Analysts believe that although short-term interest rates have significantly declined after the interest rate cut, long-term interest rates remain relatively restrained, but fundamental factors still support further declines in bond yields. In the current market sentiment and policy environment, institutions suggest that investors be cautious in bond investment and avoid excessive operations.
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