RIYADH: China stocks rose on Monday, after the country cut its benchmark lending rate and lowered the mortgage reference by a bigger margin to revive an economy hobbled by a property crisis and a resurgence in COVID-19 cases.
The CSI300 Index went up 0.8 percent at the end of the morning session, while the Shanghai Composite Index added 0.6 percent.
The Hang Seng Index edged up 0.2 percent, and the Hang Seng China Enterprise Index rose 0.5 percent.
China cuts lending benchmarks to revive the faltering economy
China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week’s easing measures, as Beijing boosts efforts to revive its economy.
The People’s Bank of China is walking a tight rope in its efforts to revive growth. Offering too much stimulus could add to inflation pressures and risk capital flight as the Federal Reserve and other economies raise interest rates aggressively.
However, weak credit demand is forcing the PBOC’s hand as it tries to keep China’s economy on an even keel.
The one-year loan prime rate was lowered by 5 basis points to 3.65 percent at the central bank’s monthly fixing, while the five-year LPR was slashed by 15 basis points to 4.30 percent.
The one-year LPR was last reduced in January. The five-year tenor, which was last lowered in May, influences the pricing of home mortgages.
MGM China to inject $594 million to re-tender for casino license
Casino operator MGM China Holding said it will inject 4.8 billion patacas ($594 million) into its MGM Grande Paradise unit as it prepares to re-tender for a license to operate its gaming business in Macau.
Under the terms of a revised gaming law released by Macau’s legislature earlier this year, a casino needs a minimum capital requirement of 5 billion patacas, and the managing director of the concessionaire must hold at least 15 percent of its capital, and be a permanent resident of Macau.
MGM China, the Chinese arm of US gambling giant MGM Resorts International, said in a filing on Sunday, that if the company is awarded the new concession, co-chairperson Pansy Ho will fill that role.
MGM Grande Paradise will issue 4.07 million Class A shares to the company at an aggregate subscription price of 4.07 billion patacas, MGM China said in the filing, and issue and transfer another 730,000 Class B shares to Ho.
After the completion of the deal, MGM China and Ho’s holdings in MGM Grande Paradise will increase to 84.6 percent and 15 percent respectively, while MGM Resort International’s stake will drop to 0.4 percent from 10 percent.
(With input from Reuters)
