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Financials lead benchmark ATF index gains as commercial banks keep LPR steady

(ATF) Financial names led gains in the China Bond 50 index on Tuesday, and boosted the ATF ALLINDEX Financial gauge, as commercial banks kept the benchmark lending rate for corporate and household loans steady for the sixth consecutive month.

Both indexes, along with the ATF ALLINDEX Local Governments, climbed 0.02%, while the ATF ALLINDEX Corporates and Enterprise didn’t move at all.

The Loan Prime Rate (LPR) remained unchanged at 3.85% for the one-year contract and 4.65% for the over five-years, underscoring China’s continued economic recovery. The move comes on the heels of the central bank’s 500-billion yuan ($74bn) liquidity injection via its medium-term lending facility at the unchanged rate of 2.95% last week. The MLF rate usually acts as a guide for the LPR, which is set by a panel of commercial banks on a monthly basis.

The price of the bonds of Agricultural Bank of China recorded the biggest move across all the indexes, rising 0.54%, for a yield decline of 2.41%. The bonds were last traded on 14 October. Meanwhile, the price of GMAC-SAIC Automotive paper climbed 0.35%, for a yield decline of 3.82%. Its bonds traded last on 16 September. 

Other gains were recorded in the prices of Bank of Tianjin (+0.05% for a yield decline of 0.54%), and Huishang Bank Corporation (+0.02% for a yield decline of 0.12%). Their bonds traded last on 15 October and 19 October respectively.

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AF China Bond