Monday, July 12, 2010

China News --China import/export #s out over the weekend; China’s property prices in 70 cities rose 11.4 percent in June from a year earlier $CAF

· China import/export #s out over the weekend - China’s June exports rose better-than-expected at 43.9%oya (J.P.Morgan and consensus: 38.0%), which translates to a modest decline of 0.9% m/m, sa, but that was on the back of the sharp 13.0% m/m jump in May. The underlying sequential trend in exports thus turned up notably, to rise at a solid pace of 35.7% 3m/3m, saar by June. Meanwhile, imports came in a touch weaker-than-expected, rising at 34.1%oya in June (JPMorgan: 37.6%; consensus: 35.4%), translating into a decline of 3.3%m/m, sa, following the 2.5%m/m gain in May, with the sequential trend growing at a modest 4.4% 3m/3m, saar. Trade surplus rose modestly in June to $20.02bn (J.P.Morgan $11.7bn; consensus: $15.55bn), compared to $19.53bn in May. For the first six months this year, trade surplus came in at $55.3bn, 42.5% down from the same period last year.   

· China FX reserves rise at slowest pace in 11 yrs according to data published over the weekend – the country’s holdings rose by $7.2B to $2.454T in Q2; reserves dropped in the month of May specifically, the first monthly decline since Feb ‘09.  Bloomberg 

· China money supply in June grew at slowest rate since Dec ’08 – M2 was +18.5% in June, decelerating from +21% in May (the St was looking for a gain of 18.8%); total bank lending was Y603.4B, which was inline w/St views – Bloomberg 

· China iron ore imports fell for a third month as domestic steel companies decide to run down existing inventories in response to weakening demand and slackening steel prices – Bloomberg 

· China steel exports surge – steel-product exports were up 13.8% M/M in June and reached the highest level since Sept ’08 – Bloomberg 

· China crude purchases hit record in June – net purchases in the month of June averaged about 5.39MM BPD, or 22.14MM metric tons in total; that compares to 17.65MM tons in May; the prior record was 20.98MM tons in Apr ‘10 – Bloomberg 

· China – an advisor to the PBOC said he saw no reason for a large H2 yuan appreciation – DJ 

· Chinese insurers - The China Insurance Regulatory Commission (CIRC) plans to let insurance companies decide the assumed interest rate on conventional life insurance policies.  The higher rates could be seen as a neg. for the industry – Reuters 

· China union targeting some of the world’s largest IBs w/the aim of imposing a 2% payroll tax – the All China Federation of Trade Unions last month met w/the heads of a bunch of Western banks (inc. GS, MS, etc) and asked them to create union chapters w/I the companies; the union ultimately would like to see the banks pay a 2% payroll tax to fund labor activities – FT 

· China property market - Primary home sales in the major cities we track fell 20% w/w last week, after a 50% rebound from the trough two weeks ago and the current level is still 21% above that. Sales volume averaged 1,422/day last week in the eight cities we track. With the exception of Hangzhou (+36% w/w), Shanghai (+1% w/w) and Shenzhen (unchanged w/w), the other five cities that we track recorded double digit w/w fall in transaction volume (-10% to -42%), with Chengdu, Shenzhen and Tianjin’s transaction volume falling close to the trough level.   · China property market – Chinese gov’t relaxes some real estate restrictions - Banks in China's first-tier cities, including Shanghai and Shenzhen, have all resumed lending to third homes; however, a prominent Chinese developer says there has been no relaxation of policies("The current policy will last for a pretty long period of time," he told a forum. "The government will not lightly ease policy.") – Reuters

· China’s property prices in 70 cities rose 11.4 percent in June from a year earlier, according to a report in the statistic bureau’s newspaper, China Information News. That compares with 12.8 percent in April and 12.4 percent in May; on a M/M basis, Chinese property prices fell 0.1% M/M, the first decline in 16 months – Bloomberg 

· China money market rate – the 7-day repurchase rate in China tumbled as money market stresses ease following IPO activity winding down – the 7-day repo rate fell 23bp – Reuters

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