1. Bond Issuance

In April, total bond issuance registered RMB6,215.36 billion. The issuance of treasury bonds, local government bonds, financial bonds, corporate credit bonds,1 credit-asset-backed securities, and interbank certificates of deposit (CDs) reached RMB751.85 billion, RMB672.85 billion, RMB1,005.77 billion, RMB1,521.46 billion, RMB25.75 billion, and RMB2,196.68 billion, respectively. As of end-April, outstanding bonds held in custody amounted to RMB148.7 trillion, including RMB128.9 trillion in the interbank bond market and RMB19.8 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 RMB25.7 trillion, RMB36.8 trillion, RMB35.7 trillion, RMB32.2 trillion, RMB2.3 trillion and RMB14.4 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB42.63 billion respectively.

As of end-April, outstanding bonds held in custody amounted to RMB148.7 trillion, including RMB128.9 trillion in the interbank bond market and RMB19.8 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 RMB25.7 trillion, RMB36.8 trillion, RMB35.7 trillion, RMB32.2 trillion, RMB2.3 trillion and RMB14.4 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB42.63 billion.

2. Bond Market

In April, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 20.5 percent (a month-on-month decrease of 1.3 percent) to RMB24.4 trillion, with the daily average standing at RMB1,221.42 billion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 41.9 percent, while those with each trade above RMB90 million made up 51.4 percent. The average value per trade was RMB49.556 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.2 trillion, averaging RMB169.51 billion daily. A total of 78,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB11.45 billion.

3. Bond Market

Opening-up As of end-April 2023, overseas institutions held RMB3.2 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 RMB2.1 trillion of treasury bonds, or 67.0 percent of their bond holdings in the interbank bond market, and RMB0.7 trillion of policy financial bonds, or 21.8 percent of their bond holdings in the interbank bond market.

4. Money Market

In April, interbank money market transactions increased by 25.2 percent year on year (a month-on-month decrease of 8.8 percent) to RMB144.2 trillion. Specifically, pledged repo transactions rose by 26.8 percent year on year (a month-on-month decrease of 8.9 percent) to RMB131.6 trillion; outright repo transactions went up by 23.0 percent year on year (a month-on-month decrease of 5.9 percent) to RMB482.02 billion; and interbank lending transactions increased by 10.4 percent year on year (a month-on-month decrease of 8.4 percent) to RMB12.1 trillion. Repo transactions of exchange-traded standardized bonds went up by 16.1 percent year on year (a month-on-month decrease of 19.2 percent) to RMB35.8 trillion.

In April, the monthly weighted average interest rate on pledged repos stood at 1.77 percent, down by 8 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.69 percent, down by 1 bp from a month earlier.

5. Bill Market

In April, commercial drafts that were accepted totaled RMB1.9 trillion while those discounted amounted to RMB1.4 trillion. As of end-April, the outstanding amount of accepted commercial drafts stood at RMB18.3 trillion, and those discounted registered RMB12.2 trillion. In April, 88,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 91.8 percent of all issuing enterprises. Bills issued by MSMEs reached RMB1.1 trillion, representing 60.9 percent of the total issuance. Of all the enterprises that discounted bills, 81,000 (96.4 percent) were MSMEs. The bills they discounted registered RMB0.9 trillion, accounting for 68.9 percent of the total amount of discounted bills.

6. Stock

At end-April, the Shanghai Composite Index closed at 3323.3 points, increasing by 50.4 points (1.5 percent) from a month earlier. The Shenzhen Component Index closed at 11338.7 points, decreasing by 387.7 points (3.3 percent) from a month earlier. In April, the average daily turnover on the Shanghai Stock Exchange increased by 23.9 percent month on month to RMB494.42 billion and that on the Shenzhen Stock Exchange increased by 21.8 percent month on month to RMB646.88 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-April, there were 3,988 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,210 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) and securities companies (asset management) held 51.3 percent of the total, and the top 200 investors held 81.8 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 67, 1, 12, and 11, respectively, while 90 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In April, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 65.5 percent of such transactions, mainly including securities companies (proprietary), fund companies (proprietary) and joint stock 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)