Financial Indicators – China Q1(2016) – Summary

In Q1 of 2016, the Chinese economy generally made steady progress. With some economies losing growth momentum amidst numerous uncertain and unstable factors, the tertiary industry gained more weight in the economy; the growth of industrial output and exports stabilized and GDP grew 6.7% year on year. During the same period, all-system financing aggregates recorded a historical high, whiles cross-border RMB businesses fell in year-on-year terms. Monetary aggregates grew rapidly. Deposits in financial institutions grew at a steady and relatively rapid pace. Outstanding deposits of domestic and foreign currencies in all financial institutions posted 145.4 trillion yuan, up 12.6% year on year and representing an acceleration of 0.2% point from end-2015. Outstanding RMB deposits registered 141.1 trillion yuan, up 13.0% year on year and an acceleration of 0.6% point from end-2015. Outstanding deposits in foreign currencies registered USD 666 billion. This was an increase of USD 38.6 billion from the beginning of the year and a deceleration of USD 44.9 billion year on year. Loans of financial institutions registered relatively rapid growth. Outstanding loans in domestic and foreign currencies of all financial institutions posted 103.8 trillion yuan, up 13.4% year on year and on par with the figure at end-2015. Outstanding RMB loans stood at 98.6 trillion yuan at end-March, representing growth of 14.7% year on year and an acceleration of 0.4% points from end-2015. RMB loans to the household sector grew rapidly by 17.6% year on year to 28.3 trillion yuan at end-March, representing an acceleration of 0.8% point from end-2015. Growth of repo transactions on the inter-bank market doubled, and the turnover of inter-bank borrowing increased rapidly.  The cumulative turnover of bond repos reached 136.1 trillion yuan on the inter-bank market, representing an average daily turnover of 2.2 trillion yuan,  an increase of 101.7% year on year and an acceleration of 30.8% points from Q1 2015. The cumulative turnover of inter-bank borrowing reached 18.1 trillion yuan, with an average daily turnover of 296.5 billion yuan, an increase of 115.4% year on year, and an acceleration of 99.6% points from Q1 2015. In terms of the maturity structure, transactions were more concentrated in overnight products, which accounted for 85.3% and 87.9% of the respective turnovers in bond repos and inter-bank borrowing transactions respectively (10.3% points and 14.2%  points up from Q1 2015). The money market was active and market interest rates remained low and stable. In March, the weighted average interest rate of inter-bank borrowing and pledged repos posted 2.09% and 2.10% respectively. The short-end Shibor remained stable and the medium-and long-end Shibor declined. Spot bond trading and bond issuances expanded significantly, whereas coupon rates declined notably. Bond indices on the inter-bank markets climbed slightly. The China Bond Composite Index (net price) rose to 104.86 points by end-March, up 0.03% from end-2015; the China Bond Composite Index (full price) increased by 0.31% to reach 119.66 points. The Government Securities Index on the stock exchanges increased by1.35% to reach 156.63 points.The short end of the yield curve of government securities moved downward and the long end moved upward by a small margin, while the yield curve became steeper. At end-March, the yields of 1-year, 3-year, 5-year, and 7-year government securities declined by 21, 24, 23,and 6 basis points from end-2015, and the yield of 10-year government securities increased by 2 basis points from end-2015. Interest-rate swaps performed well. In Q1, 18,242 deals were reached on the RMB interest-rate swap market, an increase of 4.9% year on year. The notional principal volume totaled 2006.67 billion yuan, an increase of 20.9% year on year. In terms of the maturity structure, contracts with maturities of up to one year traded more and the volume of their aggregate notional principal posted 1632.54 billion yuan, accounting for 81.4% of the total. The inter-bank certificates of deposits (CDs) market developed rapidly and the issuance of CDs grew notably. By end-March, 266 financial institutions disclosed their annual plans for inter-bank CD insurance in 2016. In Q1,a total of 3,146 inter-bank CDs were issued on the inter-bank market, raising 2.94 trillion yuan.

sources:

The People’s Bank of China

China Monetary Policy Report Q1,2016

SHIBOR

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