(Bloomberg) — China will sell 750 billion yuan ($108 billion) worth of special sovereign bonds next week, in a move economists said was likely to be a rollover of existing debt rather than representing new stimulus.
The notes will be sold on Dec. 12, and issued to designated domestic banks in the interbank bond market, according to the statement posted on the Ministry of Finance website late Friday. The People’s Bank of China will carry out open market operations with relevant banks, it added. That implies the central bank will likely provide liquidity support for the banks to buy the bonds.
The MOF didn’t specify whether the bonds are new or to refinance notes coming due. China has special bonds worth 750 billion yuan maturing on Dec. 11, according to data compiled by Bloomberg. The notes were part of the debt sold in 2007 to capitalize China Investment Corp., the country’s sovereign wealth fund.
The bonds, a rarely used financing tool that was deployed during the 2020 pandemic slump, will help to “support economic and social” development, the Ministry said Friday. Such “special” sovereign bonds differ from regular sovereign bonds as they are used for specific purposes.
The newly announced issuance will likely be a rollover of the existing bond maturing Dec. 11 and so will not impact the central government’s deficit, Bloomberg Economics said in a note.
In the past, new special bond issuance has first been announced by China’s State Council which oversees the Ministry of Finance and PBOC, before being officially approved by the National People’s Congress, a legislative body. Neither body has mentioned new special bond issuance in recent months.
“We maintain our forecast that China’s 2023 total government deficit — the combination of general budget balance and increase in local government special bonds — will likely be 7.3 trillion yuan, or 5.6% of GDP,” economist David Qu said in a note
Economists have been calling for Beijing to issue special sovereign bonds to support the economy, which has been hammered by coronavirus measures and a property slump. China’s Politburo, a top decision-making body, has pledged to seek an “overall improvement” in the economy next year as Beijing moves away from its Covid Zero strategy. As a result, economists said it could not be ruled out that the bonds will represent stimulus.
“If these mean additional funds, it suggests a highly proactive economic policy for 2023, confirming the stance alluded to at the Politburo conference,” said Becky Liu, head of China macro strategy at Standard Chartered Bank. “Just the size and dates are making it very confusing — he maturing special bond is widely expected to be rolled over.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
