1. Bond Issuance

In July, the bond market saw a total issuance of RMB6.63839 trillion. The issuance of treasury bonds, local government bonds, financial bonds, corporate credit bonds , credit-asset-backed securities, and interbank certificates of deposit (CDs) reached RMB992.49 billion, RMB710.83 billion, RMB1.00049 trillion, RMB1.33929 trillion, RMB40.41 billion and RMB2.50469 trillion, respectively.

As of end-July, outstanding bonds held in custody amounted to RMB166.3 trillion, including RMB145.7 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 CDs in custody recorded an outstanding amount of RMB31.3 trillion, RMB42.6 trillion, RMB39.6 trillion, RMB32.6 trillion, RMB1.3 trillion and RMB17.7 trillion, respectively. Commercial bank over-the-counter (OTC) bonds in custody recorded an outstanding amount of RMB84.59 billion.

2. Bond Market

In July, the turnover of cash bond trading in the interbank bond market saw a year-on-year increase of 21.0 percent (a month-on-month decrease of 9.1 percent) to RMB36.3 trillion, with the daily average standing at RMB1.57730 trillion. Of the total turnover, transactions with each trade between RMB5 million and RMB50 million accounted for 50.9 percent, while those with each trade above RMB90 million made up 43.0 percent. The average value per trade was RMB42.3867 million. The turnover of cash bond trading in the stock exchange bond market was RMB4.1 trillion, averaging RMB178.28 billion daily. A total of 75,000 transactions were done in the commercial bank OTC bond market, with the total turnover of RMB46.01 billion.

3. Bond Market Opening-up

As of end-July, overseas institutions held RMB4.50 trillion, or 2.7 percent of the outstanding bonds in custody in China's bond market. Specifically, their holdings in the interbank bond market amounted to RMB4.46 trillion. By bond type, overseas institutions held RMB2.24 trillion of treasury bonds, or 50.2 percent of their bond holdings in the interbank bond market, RMB1.09 trillion of CDs, or 24.4 percent of their bond holdings in the interbank bond market, and RMB0.96 trillion of policy bank bonds, or 21.5 percent of their bond holdings in the interbank bond market.

4.Money Market

In July, interbank money market transactions decreased by 34.3 percent year on year (a month-on-month increase of 25.7 percent) to RMB9.5 trillion. Bond repo transactions declined by 11.8 percent (a month-on-month increase of 25.6 percent) to RMB147.9 trillion. Repo transactions of exchange-traded standardized bonds went up by 20.1 percent year on year (a month-on-month increase of 23.9 percent) to RMB47.4 trillion.

In July, the monthly weighted average interest rate on interbank lending stood at 1.81 percent, down by 7 bps from a month earlier, while the monthly weighted average interest rate on pledged repos was 1.82 percent, down by 7 bps from a month earlier.

5. Bill Market

In July, commercial drafts that were accepted totaled RMB3.2 trillion while those discounted amounted to RMB2.6 trillion. As of end-July, the outstanding amount of accepted commercial drafts stood at RMB18.1 trillion, and those discounted registered RMB13.5 trillion.

In July, 102,000 micro, small, and medium-sized enterprises (MSMEs) issued bills, accounting for 93.1 percent of all issuing enterprises. Bills issued by MSMEs reached RMB2.3 trillion, representing 73.3 percent of the total issuance. Of all the enterprises that discounted bills, 110,000 (96.6 percent) were MSMEs. The bills they discounted registered RMB2.0 trillion, accounting for 79.8 percent of the total amount of discounted bills.

6. Stock Market

At end-July, the Shanghai Composite Index closed at 2938.8 points, decreasing by 28.7 points (1.0 percent) from a month earlier. The Shenzhen Component Index closed at 8754.1 points, decreasing by 94.6 points (1.1 percent) from a month earlier. In July, the average daily turnover on the Shanghai Stock Exchange decreased by 8.0 percent month on month to RMB295.56 billion and that on the Shenzhen Stock Exchange decreased by 10.7 percent month on month to RMB356.99 billion.

7. Structure of Bond Holders in the Interbank Bond Market

As of end-July, there were 4,008 incorporated institutions in the interbank market, all of which were financial institutions. Of the incorporated institutions, 2,106 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 50.7 percent of the total, and the top 200 investors held 83.6 percent. The biggest, smallest, average, and median numbers of holders for a non-financial debt financing instrument were 85, 1, 13 and 13, respectively, while 87 percent of non-financial debt financing instruments were held by fewer than 20 investors.

In July, based on the trading volume of non-financial debt-financing instruments by incorporated institutions, the top 50 investors conducted 60.2 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 90.2 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)