Offshore yuan declines to five-year low

    THE yuan traded overseas yesterday fell to a five-year low after China’s central bank cut the onshore reference rate to the weakest level since May 2011, adding to speculation that the authority is guiding a decline as it focuses on rejuvenating economic growth.

    The People’s Bank of China has become more hands-off of late and allowed a “significant depreciation” in December, Malayan Banking Bhd. strategists led by Saktiandi Supaat wrote in a note dated Tuesday. The monetary authority has tolerated a 1.4 percent drop in the onshore currency this month, after propping up the exchange rate in the weeks leading up to the International Monetary Fund’s Nov. 30 decision to grant the yuan reserve status.

    Bank of China to sell 20% stake in Huaneng

    BANK of China Ltd. has agreed to sell a 20 percent stake in a power company, Huaneng International Power Development Corp., for 8.7 billion yuan (US$1.3 billion) in its latest move to streamline assets that have more than doubled since 2008.

    Pro-Power Investment Ltd., owned by China Huaneng Group, will pay cash for the stake in three installments within a year, Bank of China said in a statement yesterday. Bank of China will use the proceeds for “any new investment” for sustainable growth, it said. The bank expects to book a net gain of 2.36 billion yuan from the stake sale.

    Shanshui may default on another bond

    SHANDONG Shanshui Cement Group Ltd., which defaulted on a bond payment in November, said yesterday it was at risk of defaulting on another bond maturing soon.

    The cement firm is a mainland subsidiary of Hong Kong-listed China Shanshui Cement Group Ltd. In a statement posted on the website of one of China’s main bond clearinghouses, the firm said it might be unable to pay interest and principal on a 1.8 billion yuan (US$277.64 million) medium-term note maturing Jan. 21, 2016.

    Deutsche Bank to sell Hua Xia stake

    DEUTSCHE Bank AG has agreed to sell its 20 percent stake in Hua Xia Bank Co. to PICC Property and Casualty Co. as Deutsche Bank’s co-chief executive John Cryan advances plans to narrow the German company’s focus and raise capital buffers.

    The sale will generate as much as 25.7 billion yuan (US$4 billion), Deutsche Bank said Tuesday. The deal would have added 30 to 40 basis points to Deutsche Bank’s 11.5 percent common equity Tier 1 ratio, using Sept. 30 as a basis, the company said.