TRADING VOLUMES DECREASED;THE TIGHT FUND SUPPLY WAS EASED

 

 

Trading volumes shrank; tight fund supply eased temporarily

In October 2003, the national interbank market recorded 5,022 deals in 18 trading days, with a turnover of 1.340 trillion yuan. The average daily turnover was 74.433 billion yuan, 31.39 per cent lower than that in September. Credit lending, repo and cash bond all shrank. Turnovers of the three businesses were 179.182 billion, 920.851 billion and 239.766 billion yuan respectively. Their average daily turnovers dropped by 12.81 per cent, 35.79 per cent and 25.09 per cent respectively as compared with the previous month. The tight fund supply before the National Day eased. The market rates rebounded only at the end of this month when the Yangtze Power launched its IPO.

In the first ten months of 2003, the interbank market registered a turnover of 14.203 trillion yuan,including credit lending 1.991 trillion yuan, repo 9.71 trillion yuan and cash bond 2.498 trillion yuan.

Lending rates stabilized in fluctuation; turnover shrank markedly

In October, the lending market concluded 672 deals, with a turnover of 179.182 billion yuan. The average daily turnover stood at 9.955 billion yuan, up 75.52 per cent year-on-year, but 12.81 per cent weaker than that in September. The direct cause for the shrinking turnover lay in the decrease of deals by nearly one-third from the previous month. The lending rates, after tossing at the beginning of the month, stabilized around 2.82.

The overnight lending (IBO001) and the one-month lending (IBO1M) outperformed the other six varieties of credit lending, with their trading volumes up 176.79 per cent and 512.85 per cent respectively over the same period of last year, showing salient growths shadowing even the booming September. Other varieties, as compared with September, all saw drops to certain extents.

Repo rate rebounded; turnover plunged

In October, 2,890 repo deals were concluded in the interbank market with a turnover of 920.851 billion yuan. The average daily volume increased by 9.52 per cent year-on-year to 51.158 billion yuan, a figure 35.79 per cent lower than that in the previous month. The number of concluded deals continued the shrinking trend in the past half year. Deals concluded in October were slightly above half of that in the same period of last year, 29.33 per cent less than that in September. Repo market rate opened October at 3.229 and kept slipping to the 2.908 mark on October 27. After that, the repo rate rebounded sharply, up 14.85 per cent within the last four days of this month. The tight fund supply was worsened with the IPO of theYangtze power.

Short and medium-term repo varieties fell in terms of trading volume this month, while the long terms had a much better performance. The turnovers of the 3-month and the 6-month repo soared by 555.33 per cent and 191.60 per cent respectively over the previous month.

Bond market was inactive; yields fluctuated slightly

In October 2003, the bond market concluded 1,460 deals, valued at 239.766 billion yuan. The average daily volume of 13.32 billion yuan, though an increase of over 16-fold year-on-year, went down by a quarter as compared with September, showing a weak bond market. The yield curves almost returned to normal with the yield rates fluctuating slightly. The interbank treasury bond index remained stable around 1,141.50.

128 varieties of bonds were traded in the interbank market this month, including 38 treasury bonds, 60 policy bonds and 30 central bank papers. Among them, three bonds witnessed more than one hundred deals. The 7-year bond 020015 ranked first with 139 deals. Prompted by the central bank’s outright operation on bonds, market participants picked up their confidence, and the liquidity of long and medium-term bonds was improved.

Institutional financing

In October, city commercial banks ranked first as net borrowers, with their net borrowing volume of 527.752 billion yuan. The state-owned & joint-stock banks and rural credit cooperatives closely followed behind, and their respective borrowings were 416.703 billion and 216.259 billion yuan.

The state-owned & joint stock banks remained the largest lenders, with a net lending volume of 993.657 billion yuan in October, up 26.49 per cent year-on-year. City commercial banks ranked second as lenders. Trust investment companies, foreign-funded banks and insurance companies, though their lending volumes were far from being huge, witnessed year-on-year growths near or even over 30-fold. Their growing speeds are worth attention.