1. Bond Issuance

In May, total bond issuance registered RMB5.45616 trillion. 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 RMB735.28 billion, RMB755.35 billion, RMB984.45 billion, RMB796.27 billion, RMB25.3 billion, and RMB2.12079 trillion, respectively.

As of end-May, outstanding bonds held in custody amounted to RMB149.3 trillion, including RMB129.4 trillion in the interbank bond market and RMB19.9 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, RMB37.3 trillion, RMB36 trillion, RMB32 trillion, RMB2.3 trillion and RMB14.4 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB42.14 billion.

2. Bond Market

RMB1.24592 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 45.3 percent, while those with each trade above RMB90 million made up 48.2 percent. The average value per trade was RMB47.8515 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.4 trillion, averaging RMB168.42 billion daily. A total of 76,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB15.41 billion.

3. Bond Market Opening-up

As of end-May 2023, overseas institutions held RMB3.25 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 RMB3.19 trillion. By bond type, overseas institutions held RMB2.1 trillion of treasury bonds, or 66.7 percent of their bond holdings in the interbank bond market, and RMB0.7 trillion of policy financial bonds, or 22.3 percent of their bond holdings in the interbank bond market.

4. Money Market

In May, interbank money market transactions increased by 37.8 percent year on year (a month-on-month increase of 18.4 percent) to RMB170.7 trillion. Specifically, pledged repo transactions rose by 39.2 percent year on year (a month-on-month increase of 17.8 percent) to RMB155.1 trillion; outright repo transactions went up by 21 percent year on year (a month-on-month increase of 6.6 percent) to RMB513.9 billion; and interbank lending transactions increased by 25.4 percent year on year (a month-on-month increase of 25.4 percent) to RMB15.1 trillion. Repo transactions of exchange-traded standardized bonds went up by 22.9 percent year on year (a month-on-month increase of 5.9 percent) RMB37.9 trillion.

In May, the monthly weighted average interest rate on pledged repos stood at 1.55 percent, down by 22 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.5 percent, down by 19 bps from a month earlier.

5. Bill Market

In May, commercial drafts that were accepted totaled RMB2.3 trillion while those discounted amounted to RMB1.8 trillion. As of end-May, the outstanding amount of accepted commercial drafts stood at RMB18 trillion, and those discounted registered RMB12.2 trillion.

In May, 92,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 91.9 percent of all issuing enterprises. Bills issued by MSMEs reached RMB1.5 trillion, representing 62.7 percent of the total issuance. Of all the enterprises that discounted bills, 87,000 (96.2 percent) were MSMEs. The bills they discounted registered RMB1.3 trillion, accounting for 69.8 percent of the total amount of discounted bills.

6. Stock Market

At end-May, the Shanghai Composite Index closed at 3204.6 points, decreasing by 118.7 points (3.6 percent) from a month earlier. The Shenzhen Component Index closed at 10793.9 points, decreasing by 544.8 points (4.8 percent) from a month earlier. In May, the average daily turnover on the Shanghai Stock Exchange decreased by 16.5 percent month on month to RMB412.68 billion and that on the Shenzhen Stock Exchange decreased by 20.3 percent month on month to RMB515.73 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-May, there were 3,998 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,239 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 49.7 percent of the total, and the top 200 investors held 80.6 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 76 1, 12, and 11, respectively, while 89 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In May, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 63.8 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 90.8 percent.

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