OREANDA-NEWS. May 13, 2013. Between January and March, China’s financial market performed in a sound manner. In March, bond issuance volume increased on the interbank market year on year. The share of newly issued bonds with a maturity of less than 5 years increased. Borrowing and repo transactions on the interbank market increased from those of last month.

Interest rates declined on the money market. Spot bond transactions were brisk, and both the interbank bond index and treasury bond index on the exchange market rose by a small margin. In March, the Shanghai Stock Exchange Composite Index declined, and turnover on the Stock Exchange decreased.

I. Bond Issuance
From January to March, bond issuance on the interbank market totalled 1798.42 billion yuan, up 25.9 percent year on year. In March, bond issuance on the interbank bond market was 780.21 billion yuan, up 9.4 percent year on year and 57.1 percent month on month. At the end of March, the bonds deposited with the trust depository and clearing companies reached 27.3 trillion yuan , among which 26.0 trillion yuan or 95.1 percent were deposited with the China Government Securities Trust Depository and Clearing Co., Ltd.

From January to March, bonds with a maturity of less than 5 years had the largest share in the new issuances on the interbank market. In March, the share of newly issued bonds with a maturity of less than 5 years went up, while the share of those with a maturity of 5 to 10 years declined.

II. Interbank Borrowing
From January to March, the interbank borrowing market was generally stable, with a cumulative trading volume of 10.3 trillion yuan, up 1.4 percent year on year. In March, the interbank borrowing market had a trading volume of 3.7 trillion yuan, up 31.2 percent month on month. Among the total, overnight products reached 3.1 trillion yuan and had lion’s share of 83.9 percent.

In March, the interest rates of interbank borrowing declined month on month. The weighted average interest rate of interbank borrowing was 2.47 percent, a decline of 30 basis points from that in February.

III. Repo Transactions
From January to March, repo transactions were relatively brisk. Bond-pledged repo transactions totalled 36.6 trillion yuan, up 24.0 percent year on year. In March, Bond-pledged repo transactions reached 13.3 trillion yuan, up 34.7 percent month on month. Among the total, overnight products posted 10.9 trillion yuan and had lion’s share of 82.3 percent.

In March, repo interest rates declined month on month. The weighted average interest rate of bond-pledged repo was 2.46 percent, a decline of 43 basis points from February.

IV. Spot Bond Transactions
From January to March, the spot bond transactions totalled 21.7 trillion yuan on the interbank bond market, up 46.1 percent year on year. In March, the spot bond transaction volume was 8.5 trillion yuan, up 63.6 percent from February.

In March, the interbank bond index and treasury bond index on the exchange market both rose by a small margin. At the end of March, the interbank bond index closed at 146.66 points, up 0.5 points or 0.34 percent month on month; the treasury bond index on the exchange market closed at 136.96 points, up 0.37 points or 0.27 percent from a month ago.

V. Stock Market Transactions
In March 2013, the Shanghai stock index declined. The Shanghai Stock Exchange Composite Index closed at 2236.6 points at the end of the month, down 128.97 points or 5.45 percent from that at the end of February. The A-share market of the Shanghai Stock Exchange had an average daily turnover of 97.13 billion yuan, down 11.35 billion yuan month on month.

(Source: China Government Securities Depository Trust & Clearing Co.,Ltd, National Interbank Funding Center, Shanghai Clearing House and Shanghai Stock Exchange)