Yuan strengthens on bets Europe will tackle debt crisis IPOS from companies in western China prioritized

China’s yuan gained on speculation the European Central Bank will soon act to ease the region’s debt crisis, spurring demand for emerging-market assets.

The nation’s overseas sales climbed 1 percent in July from a year earlier, following an 11.3 percent increase in June, data showed last week. German Chancellor Angela Merkel ends her summer vacation and travels to Canada this week for talks with Prime Minister Stephen Harper, while a report on Tuesday may show the euro region’s economy contracted in the second quarter.

“Risk appetite is improving on hopes that the ECB will eventually take some actions,” said Tommy Ong, a Hong Kong-based senior vice-president of treasury and markets at DBS Bank (Hong Kong) Ltd. “That helped revive investment demand for the yuan. However, trade-related demand will remain weak as export growth is slowing.”

The China Securities Regulatory Commission will prioritize the review of initial public offering applications filed by companies in western China starting from August, the China Securities Journal reported on Monday. The commission will aim to keep a balanced pace for the review process for the Shanghai and Shenzhen stock exchanges.

The purpose is to uphold the economic and social development of the region and balance resource allocation between eastern and western regions, the newspaper quoted an unnamed official of the commission as saying. The plan will also make full use of the two stock exchanges for fundraising in order to boost the development of the real economy, the source said.

A total of 129 companies plan to be listed in Shanghai, while 629 companies plan to be listed in the Shenzhen bourse, according to the CSRC.