A fan made from Chinese currency. Photo: Xinhua

The People’s Bank of China (PBoC), the central bank, said Friday it would issue six-month renminbi bills worth 10 billion yuan (US$1.43 billion) in Hong Kong on March 26, aiming to improve the yield curve of renminbi bonds in the city.

The bills will be issued through the Central Moneymarkets Unit of the Hong Kong Monetary Authority (HKMA). Interest on the bills is payable on September 28, 2020, in arrears, subject to the modified following business day convention.

The latest issuance of the bills, the third round in 2020, was based on the “Memorandum of Co-operation on Using Central Moneymarkets Unit for Issuance of PBoC Bills” signed by HKMA and PBoC on September 20, 2018.

The PBoC said the issuance of bills in Hong Kong aims to enrich the spectrum of renminbi financial products of high credit rating in Hong Kong, improve the yield curve of renminbi bonds in Hong Kong, and support the development of offshore renminbi business in Hong Kong.

On February 7, the PBoC announced it would issue 20 billion yuan three-month bills and 10 billion yuan one-year bills in Hong Kong through the HKMA’s Central Moneymarkets Unit.

Foreign debts

The State Administration of Foreign Exchange announced it would expand the pilot program of “foreign debt facilitation,” which was first launched in Zhongguancun in Beijing in 2019, to the pilot free trade zones in Shanghai, Hubei province, Guangdong province and Shenzhen. It said it would provide more convenience to companies in Zhongguancun to borrow foreign capital. 

The pilot program of “foreign debt facilitation” was launched to allow small and medium-sized and micro high-tech enterprises to borrow foreign loans independently within a certain amount. 

Investor survey

A recent survey by the Shenzhen Stock Exchange showed that the assets in each investor account increased by 102,000 yuan on average at the end of last year from a year ago. However, the proportion of people with relatively smaller investments decreased.

The proportion of stock investment in the respondents’ portfolios increased slightly while investors also had a rising interest in investing in public funds. 

Northbound funds

Due to the rising volatility in global financial markets, a lot of investors preferred to hold more cash and reduce their investments, resulting in a net outflow of northbound funds from mainland China, according to a commentary published by the Shanghai Securities News. 

However, such a negative impact on renminbi assets will not shake China’s economy, which will maintain stable growth over the long run, it said, citing some analysts.

Southbound funds

Mainland funds have increased their investments in Hong Kong stocks, the Shanghai Securities News reported, citing the recent southbound capital flows into exchange-traded funds of Hong Kong-listed companies.

The net inflow of southbound capital amounted to about 100 billion yuan from March and 200 billion yuan from the beginning of this year, according to statistics from the Hong Kong stock exchange. Since February 24, southbound funds have shown a net inflow for 19 consecutive trading days. Shares of China Construction Bank, Tencent Holdings and the Industrial and Commercial Bank of China were strongly supported by mainland funds. 

Free trade agreements

China is committed to signing the Regional Comprehensive Economic Partnership Agreement (RCEP), proposed by 10 members of the Association of Southeast Asian Nations, by the end of this year, said Gao Feng, a spokesman for China’s Ministry of Commerce. All parties in the RCEP are working hard to finalize the agreement, he added.

China is also speeding up discussions about the establishment of a China-Japan-South Korea free trade zone and the signing of a free trade agreement with the Gulf Cooperation Council. It will proactively push forward the discussion about setting up free trade zones with Israel, Norway, Sri Lanka, South Korea and Peru.

Company news 

Anhui Guozhen Environment Protection Technology, a Shenzhen-listed company, said in a statement on Wednesday that its parent Anhui Guozhen Group will sell its 21.26% stake in the company to China Energy Conservation And Environmental Protection Group (CECEP) for 1.475 billion yuan. 

After the transaction, CECEP, controlled by the State-owned Assets Supervision and Administration Commission (SASAC), will become the company’s largest shareholder with a 29.95% stake, while Anhui Guozhen Group will hold a 11.19% stake.

Last week, SASAC acquired the controlling stake in the Shenzhen-listed Beijing Originwater Technology.

China Mobile said its net profit fell 9.5% to 106.6 billion yuan for the year ended December 31, 2019, from a year earlier. Operating revenue grew 1.2% to 745.9 billion yuan during the period. The decline in net margin was due to the increase in depreciation and amortization and cost of products sold. The company planned to boost its capital expenditure by 8.4% to 179.8 billion yuan this year. The investment related to 5G will reach 100 billion yuan in 2020, compared with 24 billion yuan in 2019.

The story was written by Xu Jiangshan and Yang Ying and first published at ATimesCN.com.