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China market round-up: PMI slumps, Moody’s to acquire Chinese ESG data provider, PBoC plans RMB bills in Hong Kong

China slump PA 230x150
By Rebecca Feng
01 Nov 2019

In this round-up, China’s manufacturing Purchasing Managers’ Index fell below market expectation in October, Moody’s will acquire a minority stake in SynTao Green Finance and the People’s Bank of China will issue Rmb30bn ($4.3bn) of bills in Hong Kong next week.

China’s official manufacturing Purchasing Managers’ Index (PMI) slumped in October, according to data released by the National Bureau of Statistics on Thursday. The index declined by 0.5 percentage point to 49.3% last month, well below market consensus.

Production, new orders and raw materials inventory sub-indices fell from 52.3%, 50.5% and 47.6% in September to 50.8%, 49.6% and 47.4% in October, respectively. The new export order sub-index, reflecting the headwinds posed by US tariffs, dropped from 48.2% in September to 47% in October.

“Given strong growth headwinds and still elevated US/China trade tensions, we expect the official manufacturing PMI to remain sluggish in coming months, the growth slowdown could gather pace, and markets could become more volatile in coming months,” Ting Lu, chief China economist at Nomura, wrote in a Thursday note.

The non-manufacturing PMI also dropped from 53.7% in September to 52.8% in October.

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Moody’s Corp said on Tuesday that it will acquire a minority stake in SynTao Green Finance, a provider of environmental, social and governance (ESG) data and analytics in China. The company provides data on listed Chinese companies, financial institutions and bond issuers as well as on macro ESG trends.

The acquisition will strengthen Moody’s presence and engagements in China, according to a press release.

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The PBoC will issue renminbi bills through the Hong Kong Monetary Authority on November 7, according to a statement. The bills will have a Rmb20bn three month portion and a Rmb10bn one year portion.

This will be the seventh PBoC bill issuance in Hong Kong. The last sale was held on September 26. The central bank first started issuing renminbi bills in Hong Kong last November.

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Schroder Investment Management (Shanghai), a wholly-owned subsidiary of Schroders, launched its second multi-asset strategy private fund in China – the Shroder PFM China Multi-Asset Income FOF No 1.

The new fund has a relatively conservative investment approach compared to its sister fund launched in August, according to a Wednesday press release.

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Alibaba Group Holding is looking to list on the Hong Kong Stock Exchange by the end of November or at the beginning of December, Chinese local media reported. The Chinese internet giant will not hold a pre-IPO roadshow, added the report. 

By Rebecca Feng
01 Nov 2019