PBoC Tightened Yuan-Dollar Rate, Midea Group Plans to Raise $2.2 Billion

Li Chen
08 May, 2026
Hong Kong

Stocks in mainland China and Hong Kong decreased on Friday amid renewed hostilities in the Strait of Hormuz, heightening fears that the fragile ceasefire between the U.S. and Iran may be breaking down.

The Hang Seng Index declined 1%, and the mainland-focused CSI 300 Index decreased 0.6% as crude oil prices resumed their advance. 

Brent crude oil prices jumped 1.1% to $101.60 a barrel over worries that energy product shipments through the Persian Gulf are likely to remain disrupted in the near future.

The People's Bank of China fixed the yuan's exchange rate at a three-year high on Thursday. 

The central bank raised the rate to 6.8487 against a dollar, compared to 6.8562 on the previous day, setting the currency for the 6.65 level before the year's end.

The slight appreciation of the exchange rate is likely to have a little impact on the country's vast export sector, as Beijing pushes to increase the acceptance of the currency in global transactions. 

The U.S. dollar, which has long been the dominant currency for international goods and commodities trade, has faced erosion of confidence due to the rise of cryptocurrencies and the arrival of the Trump administration.

 

China Indexes and Stocks 

The Hang Seng Index declined 1% to 26,354.59, and the mainland-focused CSI 300 Index dropped 0.6% to 4,872.93. 

Midea Group remained under pressure and dropped 5.6% to HK $85.80 after the company announced its plan to raise $2.2 billion through the sale of international convertible bonds. 

The household appliance maker plans to use about 60% of proceeds to finance international expansion and boost liquidity and reserve the rest for general corporate purposes. 

The bond sale in two tranches, each valued at $8.62 billion, with the first maturing in May 2027 and the second in May 2033, carries zero coupon rates and does not pay interest rates. 

At the time of maturity, the 2027 bond could be converted into stocks at HK $96.82 and the 2033 bond at HK $115.76, reflecting a 10.4% and 32% premium to Wednesday's closing price.