OREANDA-NEWS. July 10, 2013. In the first five months of 2013, China’s financial market performed in a sound manner. Bond issuance volume increased by a small margin over that in April. The share of enterprise bonds in net financing rose slightly in all-system financing aggregate.

The turnover on the money market decreased. Interest rates continued to rise on the money market. The volume of spot bond transactions decreased remarkably, interbank bond index and treasury bond index on the exchange market both rose by a small margin. The Shanghai Stock Exchange Composite Index moved upward, and stock turnover increased.

I. Bond Issuance and Net Financing by Corporate Bonds

In May, bond issuance was 942.8 billion yuan accumulatively, up 52.4 percent year on year and 4.4 percent month on month. Among the total, issuance on the interbank bond market was 906.2 billion yuan, up 47.9 percent year on year and 7.0 percent month on month. From January to May, the total bond issuance was 3.75 trillion yuan, up 38.5 percent, including 3.58 trillion yuan which was issued on the interbank bond market, up 35.5 percent year on year.

In May, enterprise net financing through bond issuing was 217.6 billion yuan, up 27.6 billion yuan over that in April, up 72.6 billion yuan over the same period of last year, accounting for 18.4 percent of all-system financing aggregate, up 7.5 percentage points from that in April.

At the end of May, the bonds deposited in the trust depository and clearing companies reached 28.06 trillion yuan, among which, 26.60 trillion yuan of bonds or 94.8 percent were deposited in the China Government Securities Trust Depository and Clearing Co., Ltd.

II. Money Market

In May, the trading volume on the interbank borrowing market was 4.44 trillion yuan with the daily trading volume averaging 201.7 billion yuan, down 16.7 percent year on year and 1.4 percent month on month. Pledged repo transaction volume was 14.19 trillion yuan, with the daily transaction volume averaging 645 billion yuan, up 2.6 percent year on year and down 4.2 percen
t month on month.

The volume of outright repo transactions was 92.2 billion yuan, with the daily transaction volume averaging 4.2 billion yuan, down 7.6 percent year on year and 23.9 percent month on month.

The turnover of standard bond repo on the exchange market was 5.61 trillion yuan with the daily turnover averaging 255.1 billion yuan, up 75.6 percent year on year and 13.7 percent month on month.

In May, the weighted average interest rate of interbank borrowing was 2.92 percent, up 42 basis points over that in April, and the weighted average interest rate of pledged repo transactions was 3.01 percent, up 46 basis points from April.

III. Bond Market Transactions

In May, the spot bond transactions on the interbank bond market totalled 2.69 trillion yuan with the daily transaction volume averaging 122.24 billion yuan, down 62.0 percent year on year and 60.6 percent month on month. The spot bond turnover on the exchange market was 152.5 billion yuan, with the daily turnover averaging 6.9 billion yuan, up 57.3 percent year on year, and down 12.4 percent month on month.

At the end of May, the interbank bond index was 148.44 points, up 0.79 points or 0.54 percent from the end of April. The treasury bond index on the exchange market closed at 137.62 points at the end of the month, up 0.23 points or 0.17 percent from the end of April.

V. Stock Market Transactions

In April, the Shanghai stock index rose by a large margin. At the end of May, the Shanghai Stock Exchange Composite Index closed at 2300.60 points, up 122.68 points or 5.63 percent from the end of April. In May, the A-share market of the Shanghai Stock Exchange had a average daily turnover of 94.9 billion yuan, up 23.5 billion yuan month on month.

(Sources: China Government Securities Depository Trust & Clearing Co.,Ltd; National Interbank Funding Center; Shanghai Clearing House; and Shanghai Stock Exchange).