China interbank bond turnover drops 9% after data block

Compagnie Financiere Tradition SA

16/03/2023 04:18

SHANGHAI, March 16 (Reuters) - Turnover in China's $18
trillion interbank bond market shrank 9% on Wednesday from the
previous session, the latest official data showed, as a
regulatory ban on money brokers' data feed business slowed
trading.
    The full brunt of the data restrictions, which took effect
on Wednesday, would be felt after market close on Thursday,
because turnover of some bonds is reported on the second day of
trading. 
    Chinese money brokers cut data feeds to vendors that provide
real-time price quotes on Wednesday after a ban from regulators,
sending participants in the world's second-biggest bond market
scrambling for workarounds as Beijing tightens its grip on data.
    Cash bond trading in China's interbank market totalled 1.28
trillion yuan ($185.39 billion) on Wednesday, down 9% from 1.4
trillion yuan on Tuesday, according to data from the National
Interbank Funding Center.
    China's interbank market accounts for about 87% of China's
$21 trillion bond market, which also includes debt instruments
traded on stock exchanges. 
    Chinese money brokers, which include the joint ventures of
Tullett Prebon, NEX International Ltd, BGC Partners, Central
Tanshi and Compagnie Financiere Tradition, were told to suspend
their data feed by regulators, sources said on Wednesday. 
    Regulators cited data security concerns, and the fact that
money brokers are not licensed to supply data to third-party
vendors, the sources said.  
    Neither the money brokers nor their regulator, the China
Banking and Insurance Regulatory Commission (CBIRC), have
responded to requests for comment. 
    Chinese bond traders have heavily relied on financial
terminals including qeubee, Wind and Dealing Matrix for
real-time price quotes, so the sudden data ban sent traders
scrambling to join QQ or WeChat messaging groups for price
information. 
    The data feed ban would make trading less efficient, and
could impact turnover, traders and data vendors have said. 
($1 = 6.9042 Chinese yuan renminbi)

 (Reporting by Li Gu and Brenda Goh; Additional reporting by
Samuel Shen; Editing by Jamie Freed)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))