Secondary market - Key charts

Offshore trading volumes fall
Offshore Chinese names trading volume continue to decrease in November. Kaisa Group Holdings was the most liquid issuer among all Chinese offshore credit issuers last month, followed by Country garden. Real estate was the most liquid industry sector in November. TAGG <GO> allows a display of aggregated post-trade volumes for fixed income securities, to show market direction and liquidity.

Chinese credit issuers offshore trading volume (November)

Source: TAGG <GO>; based on TRAC and MIFID monthly data

China credit issuers offshore trading volume has decreased from $42 billion (September monthly aggregated volume) to $15 billion (November monthly aggregated volume).

China credit issuers offshore trading volume ($ millions)

Source: TAGG <GO>; based on TRAC and MIFID monthly data

Onshore trading volumes lowest since April

Onshore trading volume in November increased slightly compared to the one of last month. The volume remained low as ~1 billion USD, of which 93% was IG bonds. It seems the market confidence is slowly coming back, but there's still a long way to go with the fates of a series of real-estate bonds unknown.

China issuers onshore trading volume ($ millions)

Source:Bloomberg Quant Platform (BQuant), Global Data

Bond yield and index change

Option-adjusted spreads (OAS) for AA rated domestic fixed-rate medium-term notes, at 202 basis points as of Nov. 28, continued to show more resilience against spread-widening than their offshore dollar-bond peers. In November, when real-estate names dominated headlines and caused volatility in the offshore market, the average OAS for the sector's AA bucket in the domestic market remained stable at about 165 bps. By contrast, AA+ rated airline issuer JuneYao Group suffered a selloff across its medium-term notes due to the Covid-19 resurgence in China in early November.

Use FIW@CN <GO> to see the yield change based on local ratings and issuers of China's domestic bonds by sector.

China domestic bond 1-month OAS change

Source: FIW@CN <GO>, Bloomberg Intelligence