FirstFT: China slashes 5-year mortgage rate

China has slashed its mortgage lending rate for the second time this year as the country’s central bank seeks to limit the fallout from a liquidity crisis in the property sector.

The five-year loan prime rate was lowered to 4.3 per cent from 4.45 per cent yesterday, exceeding the median forecast from economists polled by Bloomberg and equalling a rate cut in May that was the largest on record.

The reduction in the benchmark loan prime rate will cut borrowing costs on new mortgages nationwide and boost the country’s debt-laden real estate sector, which accounts for almost a third of annual economic output.

Mainland China shares bounced in response to the central bank’s move — with the CSI 300 gauge of Shanghai and Shenzhen-listed stocks closing up 0.7 per cent yesterday. At the close of US markets, however, US stocks suffered their biggest decline in two months, with tech shares falling sharply on worries about the gloomy economic outlook and concerns that members of the Federal Reserve will adopt a hawkish tone at a symposium this week.

Thank you for reading FirstFT Asia. — Emily

Five more stories in the news

1. Activists say Singapore’s repeal of gay sex ban is not enough LGBT+ activists have dismissed Singapore’s decision to repeal a law banning sex between men as “window dressing”. While the Asian city-state declared on Sunday that it would scrap the colonial-era law criminalising gay sex, it also announced plans to amend the constitution to “protect” the definition of marriage as a heterosexual union from legal challenge.

2. China intensifies measures to deal with heatwave Chinese authorities have stepped up emergency measures to deal with extreme heat and a crippling drought in the south-west of the country that has forced cities to dim lights and left electric vehicle drivers struggling to recharge cars. At least 50 mobile generators have been dispatched to help stabilise the local power supply, the State Grid Corporation of China said.

3. Russia accuses Ukraine in killing of Putin supporter’s daughter Russia’s FSB security service has blamed Kyiv for the car bombing that killed the daughter of a prominent supporter of Vladimir Putin’s, accusing a Ukrainian woman of planting the car bomb before fleeing to Estonia. Ukraine denied any involvement in the attack.

4. Kishida tests positive for Covid as public support declines Fumio Kishida, Japan’s prime minister, has tested positive for Covid-19, the government said yesterday. Coronavirus cases across Japan have remained at record-high levels, eroding the approval rating for the Kishida administration which had remained steady since he took office last October.

5. Singapore office rents set to hit pre-pandemic levels The return of workers to the office this year, coupled with lockdowns in China and restrictions in Hong Kong that have forced foreign companies to consider alternative locations, pushed rents for prime office space in the city centre to S$10.74 (US$7.71) per square foot in the second quarter, according to real estate group JLL.

The day ahead

UK hosepipe ban comes into force South West Water will introduce a ban covering Cornwall and parts of Devon, the first such restrictions in 26 years, while Thames Water’s will affect 15mn customers across the south of England. A ban for Yorkshire households begins on Thursday.

S&P Global/IHS Markit composite PMI Purchasing managers’ index data for services and manufacturing is set to publish in the Eurozone, France, Germany, Japan and the US. The reading from the eurozone is forecast to drop from 49.9 in July to 49.5 in August.

What else we’re reading

The rise and rise of Korean pop culture Today, Korean culture is so widespread in the west that K-pop idols are invited to the White House, K-pop stars are global ambassadors for luxury brands, and Korean series break viewership records. But this wasn’t always the case. This is how the global spread of Korean pop culture accelerated.

Soaring fertiliser prices threaten to spark Africa food crisis The price of nitrogen-based fertilisers has hit record highs in line with natural gas costs in the wake of the war in Ukraine. Growers have cut usage in response, threatening to reduce food production and deepen a global food crisis and raising the prospect of social unrest on the continent.

How a 20-year-old student made $110mn riding the meme stock wave He may not have succeeded in his bid to become the youngest US president at the age of 18, but last week Jake Freeman emerged as one of the youngest investors to generate a nine-figure windfall by trading the meme stock frenzy.

A war over Taiwan could go nuclear The single most important question about a potential war over Taiwan between the United States and China is whether such a conflict could remain non-nuclear. Policymakers and the US public can no longer ignore the fact that a new nuclear age has dawned, writes Michael Auslin, an author and Hoover Institution fellow at Stanford.

Why staff are being sent to bond with nature According to a recent global survey, most workers are unable to explain their own companies’ climate commitments. Could environmental retreats — from sleeping in the woods to hugging trees — solve the disconnect?

Food & drink

Have you cracked for the canned wine craze? These six brands of tinned vintages are way better than you think.