The Chinese Bond Market

China's government bond ____ , which is relatively new, is booming now. In July 1996 alone, some Rmb 220 billion worth of bonds changed hands on the Shanghai Stock Exchange.

Modest by international standards, perhaps, but impressive in a country where only three years _____ the government funded most of its deficit by printing money.

Banks and securities houses seem confident that, with China's bond market now increasing rapidly in size, the underwriting of and trading in government bond issues will be a profitable ____ of business in the future.

Several securities companies _____ in bonds have already been set up. Other securities houses are in the process of organizing specialist departments to run their bond business.

The focus of this activity is the Shanghai Stock Exchange, where over 80% of China's government bonds are ____. Market participants disillusioned by the ups and downs in China's stock market are finding bonds a more secure _____ of investment, turning Shanghai into the country's principal government bond market.

China's bond market is a relatively new one and, not surprisingly, most of the floor traders do not have a long ____ track record.

Most are young, university _____ with degrees in international finance from Shanghai universities. Before they can start trading they have to ____ a one-month intensive course organized by the Shanghai Stock Exchange and ____ an exam.

The Shanghai Stock Exchange has set a limit that one transaction cannot move the market more than 10% up or down from the receding one.

However, to paint China's bond market as ____ from machinations would be misleading. People try to make the price go up and down, just as in the equity market. The most profitable activity is, of course, getting inside information on the central bank's plans about setting the interest rate.

Besides, short selling is a problem. Both paperless and physical bonds are _____ on the Shanghai exchange. If a sell order for a paperless bond is placed and there is no bond in the account, the ____ is automatically rejected by the computer. With paper bonds, short selling is _____ only after trading at time of settlement, and has to be cancelled then. Fortunately, the Ministry of Finance is trying to issue more and more of its bonds in scripless form.

However, brokers warn that one disadvantage of moving to scripless form is that investors who want to buy and hold bonds tend to prefer physical evidence of their investments, and may not be sc keen to buy scripless _____ .

China has no central custodian. Under a programme sponsored by the Asian Development Bank, China's Ministry of Finance is implementing a project to build up a central depository in China.

The regulatory authorities are paying much ____ to the development of the REPO market since it has helped stimulate liquidity in China's bond market.

Although Ministry of Finance officials say they are keen to attract foreign investors the bond market is likely to be closed to ____ for at least a couple of years.

Words you may need:

Англійський варіант	Російський варіант	Український варіант
to fund the deficit	финансировать дефицит	фінансувати дефіцит
to print money	neчатать деньги	друкувати гроші
ups and downs	взлеты и падения	злети і падіння
inside information	внутренняя информация (для должностных лиц; не подлежащая использованию на рынке)	внутрішня інформація (для посадових осіб; не підлягаюча використанню на ринку)
short selling	«короткая продажа»	«короткий продаж»
account	onepaционный период на бирже	операційний період на біржі
in scripless form	в электронном варианте	у електронному варіанті
custodian	xpaнилище ценностей	сховище цінностей