ECB, China extend currency swap agreement

    THE European Central Bank (ECB) and the People’s Bank of China have agreed to extend a currency swap arrangement put in place three years ago as part of a string of moves aimed at encouraging global use of the yuan.

    The Chinese and eurozone central banks will extend the arrangement for another three years, the ECB said yesterday, maintaining a maximum size of 350 billion yuan (US$52.45 billion) and 45 billion euros (US$50.38 billion). While the swap line is a backstop facility that won’t be used most of the time, it is a symbol of the growing trade between two of the world’s largest economic powers.

    Dongbei Special Steel makes revival plan

    DONGBEI Special Steel Group, the struggling Chinese steelmaker, has ironed out a business revival plan, aiming to return to profit and slash leverage ratio in three years’ time, the Economic Observer reported yesterday, citing unidentified sources.

    According to the plan, made at an internal meeting Sept. 20, Dongbei Special Steel aims to make a profit of 300 million yuan (US$44.98 million) in 2018 on total revenue of 35 billion yuan, while reducing debt-to-assets ratio to below 60 percent, the newspaper said, without giving comparative figures.

    Stocks sag ahead of long holiday

    CHINA’S stocks sagged yesterday in thin trading, as investors’ risk appetite continued to wane ahead of the week-long National Day holiday that starts this Saturday.

    The blue-chip CSI300 index fell 0.3 percent to 3,230.89, while the Shanghai Composite Index also lost 0.3 percent to 2,987.86 points. Recent economic data have shown signs of recovery in China’s economy. Industrial sector profits jumped 20 percent in August, the best showing in three years. But many investors remain sceptical about the sustainability of a recovery that they believe has depended on government stimulus.

    Postal Savings Bank makes flat trading debut

    SHARES in Postal Savings Bank of China yesterday made a flat trading debut in Hong Kong after the State-owned lender raised US$7.4 billion in the world’s biggest initial public offering in two years, priced the deal near the bottom of its marketing range.

    The lukewarm start for the bank comes as investors remain cautious on the outlook for the Chinese banking industry, battling with mounting bad debts amid a slowing economy. Retail demand for the IPO by the last of China’s big banks to go public was modest.