China secondary bond market:

Domestic yield dropped in October

Offshore trading volumes down in October

• Based on MiFID and Trace data, China offshore bonds' total trading volume was $7.4 billion in October, more than $7 billion in September. Kaisa Group Holding was the most actively traded.
• TAGG <GO> provides a display of aggregated post-trade volumes for fixed-income securities, to show market direction and liquidity.

Offshore trading volume of China issuers

Source: Bloomberg TAGG <GO>; TRACE and MIFID data

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Domestic yield dropped in October

Domestic bond yields dropped in October on expectations that the PBOC would keep its interbank liquidity relatively ample due to the economic slowdown. The bond universe's average yield to maturity for fixed-rate medium-term notes dropped 3.5 basis points for all rating buckets and sectors. By China's local rating buckets, AAA rose 3 bps, AA rose 6.5 bps, and non-rated bonds dropped 7.6 bps. By sector, real estate rose 21 bps despite all the other sectors seeing decreases in yield by 5.7 to 10.4 bps. Chengtou issuer spreads dropped 7.3 bps.

Property-issuer Gemdale's bond price plummeted on fears about the company's debt situation after online market rumors, despite its green-tier status in the "three red lines" debt standards and high cash coverage in its 1.4x short-term debt ratio.

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

China domestic bonds yield to maturity by sector

Source: FIW@CN <GO>, Bloomberg Intelligence