1. Bond Issuance

In September, total bond issuance registered RMB6.05858 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 RMB1.18226 trillion, RMB768.44 billion, RMB809.15 billion, RMB1.16105 trillion, RMB34.49 billion, and RMB2.07859 trillion, respectively.

As of end-September, outstanding bonds held in custody amounted to RMB153.9 trillion, including RMB133.4 trillion in the interbank bond market and RMB20.5 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 RMB27.6 trillion, RMB38.6 trillion, RMB37.2 trillion, RMB32.4 trillion, RMB2.2 trillion and RMB14.6 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB49.55 billion.

2. Bond Market

In September, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 16.2 percent (a month-on-month increase of 2.7 percent) to RMB27.4 trillion, with the daily average standing at RMB1.36774 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted 46.6 percent, while those with each trade above RMB90 million made up 46.7 percent. The average value per trade was RMB46.451 million. The turnover of cash bond trading in the stock exchange bond market was RMB4.4 trillion, averaging RMB219.88 billion daily. A total of 84,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB15.47 billion.

3. Bond Market Opening-up

As of end-September 2023, overseas institutions held RMB3.25 trillion, or 2.1 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 RMB2.07 trillion of treasury bonds, or 64.9 percent of their bond holdings in the interbank bond market, and RMB0.69 trillion of policy financial bonds, or 21.6 percent of their bond holdings in the interbank bond market.

4. Money Market

In September, interbank money market transactions decreased by 0.9 percent year on year (a month-on-month decrease of 19.9 percent) to RMB146.8 trillion. Specifically, pledged repo transactions rose by 2.8 percent year on year (a month-on-month decrease of 19.7 percent) to RMB136.4 trillion; outright repo transactions went down by 17.2 percent year on year (a month-on-month decrease of 12.9 percent) to RMB402.57 billion; and interbank lending transactions decreased by 32.8 percent year on year (a month-on-month decrease of 23.1 percent) to RMB10.0 trillion. Repo transactions of exchange-traded standardized bonds went up by 4.3 percent year on year (a month-on-month decrease of 10.2 percent) to RMB36.6 trillion.

In September, the monthly weighted average interest rate on pledged repos stood at 1.96 percent, up by 21 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.87 percent, up by 15 bps from a month earlier.

5. Bill Market

In September, commercial drafts that were accepted totaled RMB2.7 trillion while those discounted amounted to RMB1.9 trillion. As of end-September, the outstanding amount of accepted commercial drafts stood at RMB18.3 trillion, and those discounted registered RMB12.7 trillion.

In September, 105,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 91.8 percent of all issuing enterprises. Bills issued by MSMEs reached RMB1.8 trillion, representing 65.7 percent of the total issuance. Of all the enterprises that discounted bills, 109,000 (96.2 percent) were MSMEs. The bills they discounted registered RMB1.4 trillion, accounting for 74.9 percent of the total amount of discounted bills.

6. Stock Market

At end-September, the Shanghai Composite Index closed at 3110.5 points, decreasing by 9.4 points (0.3 percent) from a month earlier. The Shenzhen Component Index closed at 10109.5 points, decreasing by 308.7 points (3.0 percent) from a month earlier. In September, the average daily turnover on the Shanghai Stock Exchange decreased by 16.5 percent month on month to RMB303.09 billion and that on the Shenzhen Stock Exchange decreased by 9.9 percent month on month to RMB416.63 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-September, there were 4,022 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,197 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 (asset management), trust companies (asset management) and large state-owned commercial banks (proprietary), held 50.5 percent of the total, and the top 200 investors held 81.6 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 63, 1, 12, and 12, respectively, while 89 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In September, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 64.7 percent of such transactions, mainly including securities companies (proprietary), fund companies (proprietary) and wealth management subsidiary companies (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 Ex Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Financial Assets Exchange)