Regulations loosened to for more bonds to be issued

Regulators have increased the amount of bonds institutions allowed to issue on the inter-bank market, as bond issuance growth slumped this year amid a slowing economy.

Previously, only issuers rated above AA, which accounts for around 75 percent of the inter-bank market, were able to issue bonds totaling no more than 40 percent of their net assets.

The National Association of Financial Market Institutional Investors said during the weekend that short-term financing bills, bonds with a maturity of less than one year, will not be taken into account when calculating the 40-percent limit. And the balance of the bill alone can reach 40 percent of the net assets.

The move effectively allows institutions to issue up to 40 percent more bonds, which could rapidly enlarge the size of the country’s bond market.

Bond market growth slowed this year. In the January to May period, the balance of short-term financing bills grew 5.21 percent, compared with 47 percent in the same period last year, while the rate for medium-term notes, bonds with a maturity of five to 10 years, was 9.78 percent, compared with 65 percent between January and May last year.