ATF indices close stable as financials post big moves

Both gains and losses seen in bank names, while industrial and energy names also shake up ATF indices 

ATF indices close stable as financials post big moves
China Development Bank was one of a number of banks' whose bonds rose on Wednesday. File photo by AFP.

(ATF) ATF indices closed the day stable on Wednesday, with only the ATF ALLINDEX Financial retreating. The flagship China Bond 50 index, along with the ATF ALLINDEX Corporates, Enterprise and Local Government rose just 0.01%, while the ATF ALLINDEX Financial lost 0.07%. 

Within the China Bond 50 index, notable upward moves were seen in bank names, with gains in the bonds of China Development Bank (0.12%), the Export-Import Bank of China (0.06%) and Agricultural Development Bank (0.43%), while Bank of Jiangsu – a component of the ATF ALLINDEX Financial – rose 0.06%.

The flagship ATF China Bond 50 index rose 0.01% on Wednesday.

The ATF ALLINDEX Financial gauge lost 0.07% on Wednesday.

Losses in the bonds of China Minsheng Banking (-0.02%), China Zheshang Bank (-0.11%), Bank of Beijing (-0.22%), Bank of Hangzhou (-0.22%), Citic Securities (-0.1%), and China Bohai Bank (-0.86%) weighed on the ATF ALLINDEX Financial.

A coupon payment by China Securities was a further drag on the index, leading to a price drop of 3.37% on its bonds.

The ATF ALLINDEX Corporates sub-index rose by 0.01%.

Sharp moves were seen in the ATF ALLINDEX Corporates among energy and industrial names, with losses in the bonds of Shaanxi Coal and Chemical Industry (-0.19%), Guangzhou Metro (-0.44%) and Henan Investment (-0.4%), and gains in the bonds of Jiangxi Provincial Water Conservancy (0.93%), Jizhong Energy (0.02%) and Fuyang Construction (0.25%).

The ATF ALLINDEX Enterprise gauge also rose by 0.01%.

Shaanxi Coal and Guangzhou Metro additionally weighed on the ATF ALLINDEX Enterprise, along with Nanjing state-owned assets: these bonds lost 0.65%. Meanwhile, Xi’an Hi-tech Holding and Datong Coal Mine Group climbed 0.02%. 

The ATF ALLINDEX Local Government gauge also rose by 0.01% on Wednesday.

On Wednesday, the Shanghai Composite Index gained for the third session, adding 0.17% as China posted a third straight month of growth in its Caixin Services PMI, underscoring China’s continued recovery from the Covid-19 pandemic.

However, service activity rose at a slower pace, dropping to 54.1 in July, versus 58.4 in June and 55 in May. This was likely due to heavy rains and resurgence of Covid-19 clusters in some cities, Jingyang Chen, an economist for Greater China at HSBC, said in a research note.

Employment shrank for the sixth consecutive month in the services sector, she noted, suggesting that stabilising employment continues to be a key challenge for the government. She expected a continued recovery in the coming months, as a result of continued policy support and the reopening of more services sectors.

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