Investment Daily Note

Market Highlights

A policy document named "Guidelines on Deepening State-owned Enterprise (SOE) Reform" has been sent to various enterprises, Economic Observer reported. The report continued that the document has been vetted by the Central Government and would soon be announced to the public. We expect the news might spur capital flow into sectorswith SOE reform concept, e.g. petroleum and petrochemicals, automobile manufacturing, airline.

China's foreign exchange reserves dropped sharply by nearly US$94 billion for August, compared with July, which was the largest monthly decrease on record, as People's Bank of China sold US dollar to support exchange rate of renminbi since the foreign exchange reform last month. The market is worried that China's foreign exchange reserves would continue to dwindle, which lead offshore renminbi to resume falling sharply.