Download → Financial Market Report (February 2023)

1. Bond Issuance

In February, total bond issuance registered RMB5472.43 billion. The issuance of treasury bonds, local government bonds, financial bonds, corporate credit bonds,credit-asset-backed securities, and interbank certificates of deposit (CDs) reached RMB673.0 billion, RMB576.14 billion, RMB805.35 billion, RMB929.71 billion, RMB21.34 billion, and RMB2,452.5 billion, respectively.

As of end-February, outstanding bonds held in custody amounted to RMB146.4 trillion, including RMB126.9 trillion in the interbank bond market and RMB19.5 trillion in the exchange-traded bond market. By bond type, treasury bonds, local government bonds, financial bonds, corporate credit bonds, credit-asset-backed securities and interbank certificates of deposit (CDs) in custody recorded an outstanding amount of RMB25.3 trillion, RMB36.0 trillion, RMB34.8 trillion, RMB32.0 trillion, RMB2.4 trillion and RMB14.3 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB43.75 billion.

2. Bond Market

In February, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 9.0 percent (a month-on-month increase of 22.2 percent) to RMB21.7 trillion, with the daily average standing at RMB1,083.59 billion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 45.4 percent, while those with each trade above RMB90 million made up 47.4 percent. The average value per trade was RMB46.531 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.1 trillion, averaging RMB153.25 billion daily. A total of 169,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB21.96 billion. 

3. Bond Market Opening-up

As of end-February 2023, overseas institutions held RMB3.3 trillion, or 2.2 percent of the outstanding bonds in custody in China’s bond market. Specifically, their holdings in the interbank bond market amounted to RMB3.2 trillion. By bond type, overseas institutions held RMB2.2 trillion, or 67.4 percent of treasury bonds, and RMB0.7 trillion, or 22.0 percent of policy financial bonds.

4. Money Market

In February, interbank money market transactions increased by 35.9 percent year on year (a month-on-month increase of 12.3 percent) to RMB120.6 trillion. Specifically, pledged repo transactions rose by 38.8 percent year on year (a month-on-month increase of 14.2 percent) to RMB110.6 trillion; outright repo transactions went up by 5.1 percent year on year (a month-on-month increase of 41.9 percent) to RMB403.54 billion; and interbank lending transactions increased by 10.3 percent year on year (a month-on-month decrease of 5.9 percent) to RMB9.6 trillion. Repo transactions of exchange-traded standardized bonds went up by 41.2 percent year on year (a month-on-month increase of 25.1 percent) to RMB38.3 trillion.

In February, the monthly weighted average interest rate on pledged repos stood at 2.1 percent, up by 51 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.92 percent, up by 49 bps from a month earlier.

5. Bill Market

In February, commercial drafts that were accepted totaled RMB1.5 trillion while those discounted amounted to RMB1.0 trillion. As of end-February, the outstanding amount of accepted commercial drafts stood at RMB18.6 trillion, and those discounted registered RMB12.6 trillion.

In February, 72,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 90.6 percent of all issuing enterprises. Bills issued by MSMEs reached RMB0.9 trillion, representing 60.5 percent of the total issuance. Of all the enterprises that discounted bills, 68,000 (96.5 percent) were MSMEs. The bills they discounted registered RMB0.7 trillion, accounting for 70.4 percent of the total amount of discounted bills.

6. Stock Market

At end-February, the Shanghai Composite Index closed at 3279.6 points, increasing by 23.9 points (0.7 percent) from a month earlier. The Shenzhen Component Index closed at 11783.8 points, decreasing by 217.5 points (1.8 percent) from a month earlier. In February, the average daily turnover on the Shanghai Stock Exchange increased by 8.9 percent month on month to RMB361.52 billion and that on the Shenzhen Stock Exchange increased by 17.0 percent month on month to RMB535.99 billion.

7. Structure of Bond Holders in the Interbank Bond

As of end-February, there were 3,969 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,179 were holders of debt-financing instruments issued by non-financial institutions 2 (“non-financial debt financing instruments” for short). By the size of bond holdings, the top 50 investors, mainly including public funds, large state-owned commercial banks (proprietary), held 51.6 percent of the total, and the top 200 investors held 81.9 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 65, 1, 12, and 11, respectively, while 90 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In February, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 64.4 percent of such transactions, mainly including securities companies (proprietary), fund companies (proprietary) and commercial banks (proprietary). Transactions by the top 200 investors accounted for 91.1 percent.

(Sources: China Securities Regulatory Commission, China Central Depository & Clearing Co., Ltd., National Interbank Funding Center, Shanghai Clearing House, Shanghai Commercial Paper Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Financial Assets Exchange)