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 Corporate 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%.
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.
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This report appeared first on Asia Times Financial.