Top stories of China bond market on Nov. 20 as follows:
1. The People's Bank of China, China's central bank, conducted 20 billion yuan worth of 7-day reverse repos in Thursday's open market operation, terminating seven straight sessions of 10 billion yuan reverse repos sales after the central bank cut both the benchmark interest rates and required reserve ratio (RRR) in October.Traders noted that the move showed the central bank's intention to keep liquidity environment stable after the resumption of the initial public offerings (IPO). Shenwan Hongyuan Securities pointed out that due to seasonal factors, the central bank was expected to adopt open market operations, interest rate cut and required reserve ratio cut to stabilize the liquidity condition in the future.
2. China's Ministry of Finance (MOF) will invite bidding for 10 billion yuan of 91-day zero coupon Treasury bills Friday. According to MOF, the value date for this batch of T-bills is November 23 and from November 25, the product can be traded on secondary market. Zero coupon T-bills are usually issued at lower-than-par value prices and repaid by par value upon maturity to generate returns for buyers.
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