TURNOVER CONTINUALLY INCREASED AND BOND TRADING ROCKETED SHARPLY
Because of the May Day vacation, there were 24 trading days in April 2002. The interbank market traded 7,647 deals with the total turnover of 1,135.25 billion yuan and the average daily turnover of 47.30 billion yuan, which increased by 23.11 per cent as compared with last month. The market interest rate fell down in succession, among which the weighted average interest rate of interbank borrowing market and of repo market decreased by 2.61 per cent and 0.28 per cent respectively as compared with that of last month. The turnover of bond trading rocketed sharply and its average daily turnover increased by 125.89 per cent as compared with last month.
Contrary to the whole market, the average daily turnover of interbank funding market decreased in April by 20.65 per cent as compared with last month. The weighted average interbank borrowing rate followed the downtrend after the ratecut in February. It fell from 2.311 at the beginning of the month to the lowest 2.013 at the end of the month, reflecting the falling trend under the pressure of excessive fund supply.
The turnover of short-term varieties increased sharply in April. The turnover of overnight trading soared up by 80.89 per cent as compared with last month, while the 20-day and 60-day decreased by 77.20 per cent and 77.73 per cent respectively as compared with last month. The turnover of varieties with maturity within 20 days accounted for 97.87 per cent of the total interbank funding, reflecting that trading still focused on short-term varieties.
Supported by the fund cost baseline of institutions, the daily weighted average rate of repo was stable in April. It only fell by 0.28 per cent as compared with last month. The current weighted average rate of repo has fallen to around 1.950, and the possibility of further fall is little. Different from the interbank funding market, the repo market trading was hardly affected by the IPOs, and the turnover always kept at a rather high level.
The turnover of varieties with maturity within one month increased sharply in April, among which the 14-day and 1-month jumped by 301.01 per cent and 512.75 per cent respectively as compared with last month, while the 7-day and 21-day increased by 12.32 per cent and 72.53 per cent respectively. The turnover of varieties with maturity within 1 month accounted for 97.81 per cent of the total turnover. There was no trading of the 9-month and one-year varieties in April.
The bond trading rocketed sharply in April. The average daily turnover increased from one billion yuan in the first week to two billion yuan in the second week, and kept the increasing trend. The daily turnover set a new record at 6.27 billion yuan on April 23. Afterwards, the turnover shrank gradually and kept slack before May Day.
The price of bond increased with the increased turnover, the daily weighted maturity yield fell from 2.961 at the beginning of the month to 2.455 at the end of the month. The maturity yield of bond with maturity above five years fell to around 3.000.
In April, the structure of the inter-institution capital flow was basically unchanged, but the funding situation reflected the excess of fund supply. The lending of major former borrowers such as insurance companies, investment funds and security companies increased sharply. The lending of policy banks even exceeded the borrowing, which made them the second net fund lender besides the state-owned commercial banks.
(by Chen Lifeng)