1. Bond Issuance

In June, the bond market saw a total issuance of RMB7.0916 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 RMB1.28164 trillion, RM671.44 billion, RMB833.47 billion, RMB1.23392 trillion, RMB24.49 billion and RMB2.98434 trillion, respectively.

As of end-June, outstanding bonds held in custody amounted to RMB165 trillion, including RMB144.4 trillion in the interbank bond market and RMB20.6 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 RMB30.9 trillion, RMB42.3 trillion, RMB39.3 trillion, RMB32.5 trillion, RMB1.3 trillion and RMB17.5 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB79.35 billion.

2. Bond Market

In June, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 34.8 percent (a month-on-month increase of 12.8 percent) to RMB33 trillion, with the daily average standing at RMB1.7359 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 47.4 percent,while those with each trade above RMB90 million made up 46.2 percent. The average value per trade was RMB44.964 million. The turnover of cash bond trading in the stock exchange bond market was RMB3.5 trillion, averaging RMB186.28 billion daily. A total of 108,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB41.12 billion.

3. Bond Market Opening-up

As of end-June 2024, overseas institutions held RMB4.35 trillion, or 2.6 percent of the outstanding bonds in custody in China’s bond market. Specifically, their holdings in the interbank bond market amounted to RMB4.31 trillion. By bond type, overseas institutions held RMB2.21 trillion of treasury bonds, or 51.3 percent of their bond holdings in the interbank bond market, and RMB0.96 trillion of policy financial bonds, or 22.3 percent of their bond holdings in the interbank bond market.

4. Money Market

In June, interbank lending transactions decreased by 45.4 percent year on year (a month-on-month decrease of 6.3 percent) to RMB7.6 trillion. Bond repo transactions declined 24.4 percent (a month-on-month decrease of 2.2 percent) to RMB117.7 trillion. Repo transactions of exchange-traded standardized bonds went down by 0.5 percent year on year (a month-on-month decrease of 1.8 percent) to RMB38.3 trillion.

In June, the monthly weighted average interest rate on interbank lending stood at 1.87 percent, up by 2 bps from a month earlier, while the monthly weighted average interest rate on pledged repos was 1.89 percent, up by 7 bps from a month earlier.

5. Bill Market

In June, commercial drafts that were accepted totaled RMB3.4 trillion while those discounted amounted to RMB2.9 trillion. As of end-June, the outstanding amount of accepted commercial drafts stood at RMB17.8 trillion, and those discounted registered RMB12.9 trillion.

In June, 102,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 93.0 percent of all issuing enterprises. Bills issued by MSMEs reached RMB2.4 trillion, representing 71.4 percent of the total issuance. Of all the enterprises that discounted bills, 110,000 (96.3 percent) were MSMEs. The bills they discounted registered RMB2.2 trillion, accounting for 76.1 percent of the total amount of discounted bills.

6. Stock Market

At end-June, the Shanghai Composite Index closed at 2967.4 points, decreasing by 119.4 points (3.9 percent) from a month earlier. The Shenzhen Component Index closed at 8848.7 points, decreasing by 515.7 points (5.5 percent) from a month earlier. In June, the average daily turnover on the Shanghai Stock Exchange decreased by 13.6 percent month on month to RMB321.42 billion and that on the Shenzhen Stock Exchange decreased by 15.5 percent month on month to RMB399.58 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-June, there were 4,009 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,117 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 trust companies (asset management), held 50.9 percent of the total, and the top 200 investors held 83.3 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 67, 1, 13 and 13, respectively, while 87 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 62.2 percent of such transactions, mainly including securities companies (proprietary), fund companies (asset management) and joint stock commercial banks (proprietary). Transactions by the top 200 investors accounted for 91 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)