China bond market suffers from cash crunch
At least 11 companies have delayed bond sales this week as the mainland's worst cash crunch on record persists. About 7 billion yuan (HK$8.8 billion) of offers have been postponed, according to company statements posted on the websites of Chinamoney and Chinabond.
At least 11 companies have delayed bond sales this week as the mainland's worst cash crunch on record persists.
About 7 billion yuan (HK$8.8 billion) of offers have been postponed, according to company statements posted on the websites of Chinamoney and Chinabond.
Guangdong Construction Engineering said on Tuesday it would delay a 350 million yuan sale of medium-term notes to the last three months of the year from this quarter, citing big fluctuations in the bond market, according to a statement on Chinamoney, a website of the China Foreign Exchange Trade system.
The one-day repurchase rate, a gauge of interbank fund availability, dropped 442 basis points, or 4.42 percentage points, to 8.43 per cent yesterday after the central bank was said to have made funds available to lenders. The rate touched a record high of 12.85 per cent in its daily fixing on Thursday.
Demand for bonds has waned in the past two weeks in the primary market, with the finance ministry missing targets at two auctions.
There will be a "painful deleveraging process in the next few months" that may result in defaults in the manufacturing and non-bank financial sectors, according to a Nomura report.