Adviser urges use of reserves to stabilize yuan

    CHINA should use its foreign reserves to help maintain market confidence in the yuan currency, as expectations of further depreciation have led the exchange rate to overshoot against the U.S. dollar, domestic media quoted a central bank adviser as saying.

    “Now is the best time to stabilize yuan currency expectations,” Sheng Songcheng, advisor to the People’s Bank of China said. Sheng said the exchange rate has overshot as depreciation expectations are being reinforced, even though there is no basis for further depreciation as the Chinese economy is stabilizing.

    More commodity futures to meet demand

    CHINA will add products such as crude oil futures and white sugar and soybean meal options to meet market demand for commodity trading, a senior official from China’s security regulator said Saturday.

    China also plans to add iron ore and natural rubber to futures markets before gradually expanding to other products, in a push for further internationalization and to attract more overseas investors, China Securities Regulatory Commission Vice Chairman Fang Xinghai said at a conference in Shenzhen.

    CSC to price IPO in middle of expectations

    CSC Financial Co., the busiest initial public offering (IPO) underwriter in China the past three years, is set to price its Hong Kong IPO near the middle of expectations, IFR reported Friday.

    The company, partly owned by China’s top brokerage CITIC Securities Co., has sent a guidance to investors in the IPO that the shares will likely be priced at or around HK$6.81 each, the middle of its HK$6.36 to HK$7.26 indicative range, added IFR. CSC Financial is offering 1.13 billion shares in the IPO, putting the deal at HK$7.7 billion (US$993 million).

    Government aims to boost equity funding

    THE government aims to increase direct funding for companies through financial instruments such as stocks by implementing a national investment standard, a senior official at the People’s Bank of China said Saturday.

    The majority of China’s loans still come from bank deposits, while funds raised via direct channels such as equity are insufficient, limiting the scope for firms to borrow, Vice Governor Fan Yifei said. Fan said that China has a significant number of private investors with sufficient capital and the appetite for risk taking.