Bonds rise ahead of Loan Prime Rate August Fixing

 China’s benchmark lending rate expected to remain unchanged

Bonds rise ahead of Loan Prime Rate August Fixing
The ATF China Bond 50 Index rose 0.03%

(ATF) The ATF indices closed in positive territory on Tuesday ahead of China’s August fixing of its Loan Prime Rate (LPR) on Thursday. The flagship China Bond 50 climbed 0.03%, while the ATF ALLINDEX Corporates and Enterprise gauges rose 0.04%. Meanwhile, the ATF ALLINDEX Financial and Local Governments gained 0.02% and 0.01% respectively.

The LPR, set by a panel of 18 commercial banks, is expected to be kept on hold for the fourth month running, at 3.85% for the one-year LPR rate, and 4.65% for the five-year rate. The LPR is linked to the People’s Bank of China's medium-term lending facility rate, which was kept steady on Monday at 2.95%. 

Within the China Bond 50 index, the biggest gains were seen in the bonds of Zhejiang Provincial Energy Group (0.29%), China State Construction Engineering (0.54%), and China Huarong Asset Management (0.24%). Bank of China bonds lost 0.25%.

READ MORE: China increasing overseas bond issuance

Of the ATF ALLINDEX Enterprise, Zhuhai Da Heng Qin’s bonds rose 0.37%, and those of Aviation Industry Corporation of China rose 0.11% which, along with the gains in China State Construction paper, pushed up the gauge. China State Construction is a constituent of the China Bond 50 index as well as the ATF ALLINDEX Enterprise.

In the ATF ALLINDEX Financial, the biggest moves were seen in China Zheshang Bank (+0.08%) and Bank of Tianjin (+0.3%), along with China Huarong Asset Management (+0.24%) and Bank of China (-0.25%). The latter two bonds are constituents of both the China Bond 50 index and the ATF ALLINDEX Financial.    

Along with the bonds of Zhejiang Provincial Energy Group (0.29%), gains in the bonds of Qingdao Conson Development (0.44%), Henan Water (0.19%) and Jizhong Energy (0.02%) boosted the ATF ALLINDEX Corporates. Zhejiang Provincial Energy Group is a constituent of the China Bond 50 index and the ATF ALLINDEX Corporates.