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Chinese Treasuries Slump at Monday Trading
China's treasury bonds slumped with losses ranging from 0.04 percent to 0.83 percent Monday. The trading volume on the market contracted by 10 million yuan to 1.23 billion yuan.
Bond 009704 (9.78 percent, due 2007) plummeted 0.83 percent to 142.69 yuan, a record low since February 22. Accordingly, its yield rose 0.17 percentage point to 4.11 percent. Supported by the high yield, the bond is expected to rebound soon, according to Homeway, China's leading on-line financial and securities company.
As to the most active performers recently, 000696 (11.83 percent, due 2006) dipped 0.57 to drive the yield up 0.13 percentage points to 3.87 percent; the 10-year 010004 dropped by 0. 22 percent following the big loss last Friday.
There are two new stock subscriptions last Friday and there are four for Monday and Tuesday. The tight money supply for both stocks and bonds is considered an important factor that has driven the stock market and bond market down, analysts noted.
In a sharp contrast, impelled by these stock subscriptions, China's repo market witnessed a sudden boom Monday. The trade volume on three-day, seven-day, 14-day and 28-day transactions swelled to 13.8 billion yuan, as against 4.4 billion yuan last Friday. Meanwhile, the interest rate on the three-day transaction shot up to 8.02 percent from 0.78 percent, according to Homeway.
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