PBOC: Financial Market Report (February 2025)
Bond Issuance
In February, the bond market witnessed a total issuance of RMB6.67 trillion. This included treasury bonds (RMB977.56 billion), local government bonds (RMB1.31 trillion), financial bonds (RMB834.3 billion), corporate credit bonds (RMB805.85 billion), credit-asset-backed securities (RMB1.5 billion), and interbank CDs (RMB2.71 trillion). As of end-February, outstanding bonds held in custody totaled RMB180.5 trillion.
Bond Market Activity
The interbank bond market saw cash bond trading turnover of RMB27 trillion in February, marking a 6.5% year-on-year decline but a 3.9% month-on-month increase. The exchange bond market recorded a turnover of RMB2.6 trillion. Commercial bank OTC bond market transactions totaled RMB52.11 billion across 91,000 transactions.
Bond Market Opening-up
Overseas institutions held RMB4.3 trillion (2.4%) of China's bond market, with RMB4.2 trillion in the interbank bond market. Holdings included treasury bonds (RMB2 trillion, 48%), interbank CDs (RMB1.1 trillion, 27.1%), and policy bank bonds (RMB0.9 trillion, 20.4%).
Money Market
Interbank lending market transactions totaled RMB4.4 trillion, down 31.3% year-on-year and 14.3% month-on-month. Bond repo transactions decreased to RMB91.8 trillion, while exchange-traded standardized bond repo transactions rose to RMB46.1 trillion. The monthly weighted average interest rate on interbank lending was 1.95%, and on pledged repos was 2.00%.
Bill Market
Commercial drafts accepted totaled RMB2.9 trillion, with RMB2.5 trillion discounted. MSMEs accounted for 92.3% of issuing enterprises and 72% of total bill issuance. MSMEs also represented 93.6% of discounting enterprises, accounting for 75.9% of total discounted bills.
Stock Market
The SSE Composite Index closed at 3320.9, up 2.2% month-on-month, while the SZSE Component Index closed at 10611.24, up 4.5%. Daily turnover on the Shanghai Stock Exchange grew 46.3% to RMB703.77 billion, and on the Shenzhen Stock Exchange, it rose 55.6% to RMB1106.45 billion.
Interbank Bond Market Structure
The interbank market had 3,982 institutional investors, all financial institutions. The top 50 investors in corporate credit bonds held 47.7% of such bonds, while the top 200 held 78.8%. In February, the top 50 investors by trading volume accounted for 60.9% of corporate credit bond transactions, and the top 200 accounted for 90.3%.
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