1. Bond Issuance

In June, total bond issuance registered RMB6.33778 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 RMB829.94 billion, RMB830.23 billion, RMB810.82 billion, RMB1.34171 trillion, RMB26.77 billion, and RMB2.47461 trillion, respectively.

As of end-June, outstanding bonds held in custody amounted to RMB150.3 trillion, including RMB130.2 trillion in the interbank bond market and RMB20.1 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 RMB26.1 trillion, RMB37.5 trillion, RMB36.4 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 RMB44.2 billion.

2. Bond Market

In June, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 20 percent (a month-on-month increase of 3.3 percent) to RMB27 trillion, with the daily average s RMB1.28761 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 45.8 percent, while those with each trade above RMB90 million made up 47.7 percent. The average value per trade was RMB47.651 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.9 trillion, averaging RMB197.33 billion daily. A total of 76,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB18.27 billion.

3. Bond Market Opening-up

As of end-June 2023, overseas institutions held RMB3.33 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 RMB3.28 trillion. By bond type, overseas institutions held RMB2.1 trillion of treasury bonds, or 65.5 percent of their bond holdings in the interbank bond market, and RMB0.7 trillion of policy financial bonds, or 22.1 percent of their bond holdings in the interbank bond market.

4. Money Market

In June, interbank money market transactions increased by 21.2 percent year on year (a month-on-month decrease of 0.7 percent) to RMB169.5 trillion. Specifically, pledged repo transactions rose by 23.6 percent year on year (basically the same as the previous month) to RMB155.1 trillion; outright repo transactions went down by 2.5 percent year on year (a month-on-month increase of 3 percent) to RMB529.08 billion; and interbank lending transactions increased by 0.1 percent year on year (a month-on-month decrease of 8.4 percent) to RMB13.9 trillion. Repo transactions of exchange-traded standardized bonds went up by 11.3 percent year on year (a month-on-month increase of 1.6 percent RMB38.5 trillion.

In June, the monthly weighted average interest rate on pledged repos stood at 1.67 percent, up by 13 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.57 percent, up by 7 bps from a month earlier.

5. Bill Market

In June, commercial drafts that were accepted totaled RMB2.4 trillion while those discounted amounted to RMB1.8 trillion. As of end-June, the outstanding amount of accepted commercial drafts stood at RMB17.7 trillion, and those discounted registered RMB12.1 trillion.

In June, 96,000 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 63.9 percent of the total issuance. Of all the enterprises that discounted bills, 91,000 (96.2 percent) were MSMEs. The bills they discounted registered RMB1.3 trillion, accounting for 69.6 percent of the total amount of discounted bills.

6. Stock Market

At end-June, the Shanghai Composite Index closed at 3202.1 points, decreasing by 2.5 points (0.1 percent) from a month earlier. The Shenzhen Component Index closed at 11026.6 points, increasing by 232.7 points (2.2 percent) from a month earlier. In June, the average daily turnover on the Shanghai Stock Exchange decreased by 5.1 percent month on month to RMB391.67 billion and that on the Shenzhen Stock Exchange increased by 10.5 percent month on month to RMB569.77 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-June, there were 4,008 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,189 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 50.8 percent of the total, and the top 200 investors held 81.5 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 71 1, 12, and 11, respectively, while 90 percent of non-financial debt financing instruments were held by fewer than  20 investors.

In June, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 63.5 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 90.5 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)