1. Bond Issuance

In March, the bond market saw a total issuance of RMB7.15829 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 RMB920.00 billion, RMB629.45 billion, RMB956.30 billion, RMB1.65862 trillion, RMB32.75 billion and RMB2.91197 trillion,respectively.

As of end-March, outstanding bonds held in custody amounted to RMB160.8 trillion, including RMB139.9 trillion in the interbank bond market and RMB21.0 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 RMB29.8 trillion, RMB41.5 trillion, RMB38.0 trillion, RMB32.7 trillion, RMB1.7 trillion and RMB16.1 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB63.46 billion.

2. Bond Market

In March, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 50.3 percent (a month-on-month increase of 22.4 percent) to RMB39.1 trillion, with the daily average standing at RMB1.85986 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 51.3 percent while those with each trade above RMB90 million made up 42.1 percent. The average value per trade was RMB43.942 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.7 trillion, averaging RMB175.70 billion daily. A total of 94,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB22.86 billion.

3. Bond Market Opening-up

As of end-March 2024, overseas institutions held RMB4.05 trillion, or 2.5 percent of the outstanding bonds in custody in China’s bond market. Specifically, their holdings in the interbank bond market amounted to RMB4.00 trillion. By bond type, overseas institutions held RMB2.24 trillion of treasury bonds, or 56.0 percent of their bond holdings in the interbank bond market, and RMB0.84 trillion of policy financial bonds, or 21.0 percent of their bond holdings in the interbank bond market.

4. Money Market

In March, interbank money market transactions decreased by 2.1 percent year on year (a month-on-month increase of 38.0 percent) to RMB154.8 trillion. Specifically, pledged repo transactions rose by 0.4 percent year on year (a month-on-month increase of 37.6 percent) to RMB145.1 trillion; outright repo transactions went up by 29.6 percent year on year (a month-on-month increase of 61.7 percent) to RMB663.79 billion; and interbank lending transactions decreased by 30.9 percent year on year (a month-on-month increase of 43.6 percent) to RMB9.1 trillion. Repo transactions of exchange-traded standardized bonds went down by 5.3 percent year on year (a month-on-month increase of 36.0 percent) to RMB42.0 trillion.

In March, the monthly weighted average interest rate on pledged repos stood at 1.91 percent, down by 2 bps from a month earlier, while the monthly weighted average interest rate on interbank lending was 1.88 percent, up by 3 bps from a month earlier.

5. Bill Market

In March, commercial drafts that were accepted totaled RMB2.9 trillion while those discounted amounted to RMB2.2 trillion. As of end-March, the outstanding amount of accepted commercial drafts stood at RMB17.6 trillion, and those discounted registered RMB12.1 trillion.

In March, 90,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 92.7 percent of all issuing enterprises. Bills issued by MSMEs reached RMB2.0 trillion, representing 70.8 percent of the total issuance. Of all the enterprises that discounted bills, 95,000 (96.5 percent) were MSMEs. The bills they discounted registered RMB1.7 trillion, accounting for 78.2 percent of the total amount of discounted bills.

6. Stock Market

At end-March, the Shanghai Composite Index closed at 3041.2 points, increasing by 26.0 points (0.9 percent) from a month earlier. The Shenzhen Component Index closed at 9400.9 points, increasing by 70.4 points (0.8 percent) from a month earlier. In March, the average daily turnover on the Shanghai Stock Exchange decreased by 0.8 percent month on month to RMB428.34 billion and that on the Shenzhen Stock Exchange increased by 12.6 percent month on month to RMB582.53 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-March, there were 4,024 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,142 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), large state-owned commercial banks (proprietary), and joint stock commercial banks (proprietary), held 51.1 percent of the total, and the top 200 investors held 82.8 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 51, 1, 13 and 12, respectively, while 88 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In March, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 62.8 percent of such transactions, mainly including securities companies (proprietary), joint stock commercial banks (proprietary) and fund companies (asset management). Transactions by the top 200 investors accounted for 90.6 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)