BEIJING: China’s yuan fell to a one-year low against the dollar on Monday, extending losses after posting its worst week since 2015. A worsening economic growth outlook drove investors’ concerns that the currency had more room to fall.
Investor sentiment strained further on fears that strict lockdown measures would spread to Beijing after the capital city required everyone living or working in Chaoyang district to take three COVID-19 tests this week and put more than a dozen buildings under lockdown.
On Monday, the People’s Bank of China set the yuan’s midpoint rate at 6.4909 per dollar before the market opened, the weakest level since August 2021 and not far from Reuters’ estimate of 6.4873.
Both onshore and offshore yuan breached the key 6.55 per dollar in the spot market, touching their weakest levels since April 2021, before trading at 6.5412 and 6.5715, respectively, as of midday.
Chinese regulators urge more prudent IPO pricing
Chinese regulators have urged underwriters to price initial public offerings more reasonably after a third of more than 100 new listings so far this year fell on their trading debut.
The Shanghai Stock Exchange held a meeting last week with some underwriting banks, asking them to set IPO prices prudently, a spokesperson for the bourse said on Monday.
The stock exchange is also considering using the performance of newly listed shares to help asses a bank’s underwriting quality, the spokesperson added.
Chinese IPOs are underwritten mostly by Chinese banks, as well as some joint ventures with foreign banks.
China introduced a US-style IPO system when it launched Shanghai’s tech-focused STAR Market three years ago, and later expanded the reform to Shenzhen’s start-up board ChiNext.
Most of this year’s new listings that fell below their IPO price are traded on STAR and ChiNext, reflecting both bearish investor sentiment and poor pricing skills of Chinese underwriters.
Foxconn unit sees limited impact from suspended China plant
Operations at a Taiwan-based Apple Inc. supplier Foxconn unit in China’s Kunshan city remain suspended because of COVID-19 controls. Still, there is limited impact as it has shifted production elsewhere, it said on Monday.
The operations in Kunshan of Foxconn Interconnect Technology, which makes data transmission equipment and connectors, will remain closed until the authorities permit it to restart, the company said.
“As production has previously been deployed to backup factories, the factory’s main products are located in an overseas shipping warehouse, and inventory levels are still sufficient, and the impact on the company’s business is limited,” Foxconn said in a statement.
A source familiar with the situation said the plant is not a major supplier of Apple products, and the company was able to shift production to other facilities.
“We do not see an impact on iPhones,” the person said.
(With inputs from Reuters)
