The People’s Bank of China kept the one year and five year loan prime rate (LPR) — the country’s benchmark interest rate — for July at the same levels as in June.
One year and five year LPR stands at 3.85% and 4.65%, respectively.
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The central bank conducted Rmb100bn ($14.3bn) of seven-day reverse repo operations on Monday, at an interest rate of 2.2%.
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Chinese commercial banks recorded a foreign exchange settlement surplus of $78.6bn for the first six months of 2020, according to the State Administration of Foreign Exchange (Safe).
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Wang Chunying, deputy head and spokesperson for Safe, said foreign investors increased their holdings in Chinese bonds by $59.6bn over the first half of the year, and by $13.3bn in onshore stocks.
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Chinese insurers’ equity investment per quarter could be as high as 45% of total assets, should their comprehensive solvency ratios exceed 350% in the previous quarter, the China Banking and Insurance Regulatory Commission (CBIRC) said last Friday.
The regulator previously capped quarterly equity investment at 30% of total assets for all insurers.
Under the new rules, firms with a solvency ratio of 250%-300% and 300%-350% are also allowed to go beyond the old limit. They can have maximum equity investment of 35% and 40% of total assets, respectively.
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The CBIRC published guidance for commercial banks providing loans over the internet, according to a Friday statement. The regulator told banks to improve their management standards for third-party institutions and strengthen risk control measures.
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The banking and insurance regulator is encouraging its bureaus in regions heavily impacted by the recent floods to establish “green channels” for loan approvals, strengthen their financial services to local enterprises and lower loan interest rates.
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Bank of Gansu received approval from the CBIRC for a bail-out plan, according to a statement last week from the regulator’s Gansu bureau.
The CBIRC gave the green light for the bank to issue 3.75bn domestic A-shares and 1.25bn H-shares. Both should be in the form of private placements. All the proceeds must be used solely to replenish the bank’s core tier one capital.
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The China Securities Regulatory Commission (CSRC) is said to have issued a document to securities companies and fund managers, encouraging them to explore mergers and acquisitions among themselves. This is to make the securities and fund management industries “bigger and stronger”, state media reported, citing the document.
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The securities regulator started soliciting public opinion on a draft rule for imposing administrative penalties for illegal activities in securities and futures trading, according to a Friday statement.
The CSRC offered clarity on the prerequisite conditions for launching a regulatory investigation and the scope of such investigations.
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The Securities Association of China (SAC) has launched an investigation into a number of securities firms for allegedly bidding low underwriting fees for a bond issuance from China Nuclear Finance Leasing Co.
China International Capital Corp, China Securities Co, Citic Securities, Guotai Junan Securities, Haitong Securities, Ping An Securities, Shenwan Hongyuan and TF Securities are on the list, according to the SAC.
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Bank of Beijing has been banned from the bond underwriting business for six months due to its role in helping Kangde Xin Composite Material Group sell short-term notes, the National Association of Financial Market Institutional Investors, a regulator of the interbank bond market, said last week.
The penalty was due to the bank’s negligence in monitoring the issuer’s use of proceeds, the regulator said.
Kangde Xin has defaulted on multiple domestic and dollar bonds. It was penalised by the CRSC in early July for inflating some of its financial numbers.
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Restrictions will be imposed on at least seven Chinese companies in India, all of which have been identified by the government to have alleged military links, local media, including the Economics Times, reported. Alibaba, Huawei, Tencent and SAIC Motor Corp are said to be among the companies.
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The UK may suspend an extradition treaty with Hong Kong due to the new national security law on the city, Dominic Raab, UK foreign secretary, indicated in an interview with Sky News on Sunday.
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Paul Chan Mo-po, the financial secretary of Hong Kong, said the finance industry need not fear the national security law, as long as firms continue to operate normally under the existing legal framework of the special administrative region.
The law will not affect financial institutions and market participants collect and distribute information, conduct business research and analysis, or express their opinions, Chan said in a blog post on Sunday. He added that the US’s recent “so-called sanctions” on Hong Kong, while causing some concerns, have limited material impact on the local economy.
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The Securities and Futures Commission (SFC) also issued a statement on Sunday.
“The SFC would like to clarify that it is not aware of any aspect of the [national security law] which would affect or alter the existing ways in which firms and listed companies originate, access, disseminate and transmit financial market and related business information under the regulatory regime it administers,” reads the statement by chief executive Ashley Alder.
The regulator also assured the market that rules and accepted practices governing market trading activities — including in-exchange traded and over-the-counter derivative markets, the use of hedging strategies and short selling — will not change.
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Beijing lowered its coronavirus response level from level two to level three on July 20 after 14 days of zero new cases. This means that parks, gyms and libraries can reopen with a 50% maximum capacity. Beijing first escalated its response to level two on June 16 when a cluster of Covid-19 cases was found in the capital.
However, a new group of cases was found in Xinjiang. The northwest province reported five new confirmed cases and eight new asymptomatic cases last Thursday. Previously, the province had 149 consecutive days of no infections.