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China money rates stay high even after payment deadline passes
July 1, 2014 / 4:50 AM / in 3 years

China money rates stay high even after payment deadline passes

SHANGHAI, July 1 (Reuters) - China’s key money rates stayed elevated on Tuesday, with the seven-day bond repurchase agreement at its highest since late March, despite the passing of first-half deadlines to stock up on cash to meet regulatory rules and report to shareholders.

Traders said the enduring cash demand would prove temporary, however, and said that the market appeared to be following opening quotes without moving much money.

“Most quotes follow the opening price, which might not reflect the real money situation in the market,” said a dealer at a city commercial bank in Shanghai.

However, there are signs that the resumption of IPOs has juiced short-term cash demand as investors leverage up to buy into new listings -- which have consistently produced double-digit returns in the first days of trade.

For example, the listing of Guangdong Ellington Electronics Technology Co Ltd on Tuesday hit the regulatory limit up of 44 percent from its IPO price.

The weighted average of the seven-day bond repurchase agreement stood at 4.46 percent at midday on Tuesday, compared with 4.00 percent on Monday. The overnight repo rate rose slightly to 3.03 percent from 2.93 percent on Monday.

Another actively traded tenor, the 14-day repo , fell sharply to 4.69 percent on Tuesday after trading at 5.39 percent on Monday.

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MARKET DRIVERS

- China money rates rise on quarter-end demand, IPO speculation [ID: nL4N0P00Q9]

- China’s money rates slip, offer no signs of monetary policy change [ID: nL4N0OU0LH]

- As cash crunch anniversary looms, traders guess at c.bank policy direction

- China money dealers see stability, not easing going forward

- Muted impact of capital inflows a step towards liberalising deposits

- Tax man’s attack on shadow banking startles markets

- China eases Jan credit squeeze with cash, surprising transparency

- Market braces for bouts of tight liquidity in 2014

- Beijing eases corporate debt rules to offset crackdown

- China corporate financing squeezed as reform plans spark rate spike

DATA POINTS

- Fiscal deposits drive interbank liquidity trends GRAPHIC: link.reuters.com/pem75t

- China hot money tracker: Hot money inflows slow to a trickle in Dec 2013 GRAPHIC: link.reuters.com/saz74t

- Maturing central bank bills and repos upcoming GRAPHIC: r.reuters.com/vyr95t

- Chinese government bond curve rises on rate reform expectations GRAPHIC: link.reuters.com/jyr95t

- China's interest-rate swap curve rises, flattens on liquidity fears GRAPHIC: link.reuters.com/ryr95t

- China corp bond spreads widen on risk aversion GRAPHIC: link.reuters.com/bas95t

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> ($1 = 6.2214 Chinese yuan) (Editing by Jacqueline Wong)

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