China's new bank loans last month hit 3.05 trillion yuan (HK$3.31 trillion), exceeding market expectations, as the yuan jumped to a three-week high, while the country's economic recovery is expected to remain challenging in the second half.
The 3.05 trillion yuan was above economists' forecasts of 2.3 trillion yuan and compared with 2.8 trillion yuan a year ago.
New corporate medium and long-term loans - which reflect investment demand - improved from a high level recorded in the same month last year. New household mid- and long-term loans, a proxy for mortgages, also increased slightly.
Aggregate financing, a broad measure of credit, was 4.2 trillion yuan, far exceeding market estimates.
Also, the onshore yuan surged by 346 basis points to 7.1985 per US dollar, marking a new high after June 21, mainly due to the weakening greenback amid expectations rate hikes by Federal Reserve is coming to an end.
With the recent weak economic data, US asset management firm BlackRock said optimism about China's reopening was fading.
Also, China International Capital Corp (3908) lowered its forecast for the country's economic growth this year to 5.7 percent from an estimate of around 6 percent last month, and called for a higher debt-to-gross domestic product ratio and stronger stimuli for the property market.
China is signaling the potential adoption of additional property-support policies, alongside measures aimed at boosting business confidence, following the extension of existing support policies for the real estate sector, state-run financial newspapers reported yesterday.
Meanwhile, Natixis said investor concerns about the impact of local debts on lenders are not over, though the situation is not as bad as the market has priced in or expected.
China Merchant Property won a site in Shanghai for 1.87 billion yuan via a subsidiary yesterday.
