DailyReportofChinaOnshoreRMBBondMark

(1)ChinaBond IndexAnalysis

ChinaBondComposite Index tracking general performance of bond market went up today. Thenet price index excluding interest revenue rose by 0.0226%; and the totalreturn index including interest reinvested revenue rose by 0.0345%. Inaddition, the average yield to maturity was 4.4942%. The average marketcapitalization yield was 4.5227%. And the market value weighted duration was3.8415.

(2)Bond MarketPerformance:

Rate Securities

Generallyspeaking, the yields of Treasury Bonds and Policy Bank Bonds fluctuatedslightly. In the morning, the auction outcomes of EXIMBC Bonds on 5/10Y were slightlylower than former trade day, while those on 3Y went up a little. In theafternoon, ADBC continually issued Bonds on 1/5Y, which showed mixed pattern. On1Y Bond, the interest rate went down; the interest rate of 5Y went up. By theend of day, the yields of Treasury Bonds increased within 3BPs; the yields ofCDB, ADBC and EXIMBC Bonds decreased within 2BPs.

To be morespecific, the yield of Treasury Bonds (3Y) went up by 1BP to 3.62% according tothe transaction of 170008; 5Y Bonds went up by 4BPs to 3.64% resulted from thetransaction of 170007; referring to the quotation and transaction of 170006,the yield for 7Y Bonds stood at 3.7%, and notably, the yield for Treasury Bonds(10Y) increased by 1BP to 3.65% caused by the quotation and transaction of170010.

Similarly, theyields of CDB bonds went down slightly. The yield of 3Y Bond slide 1BP to 4.31%because of the transaction of 170205; 5Y Bond went down by 2BPs to 4.35%resulted from the quotation and transaction of 170206; referring to thetransaction of 170210, the yield for 10Y Bond kept stable at 4.34%.

Moreover, yieldsof ADBC Bonds fluctuated slightly. The yield for 3Y Bond stood at 4.37%; 5YBond kept at 4.42%; 10Y Bond kept at 4.46% according to the transaction of170405.

Furthermore, theyields for EXIMBC Bonds also waved slightly. The yield of 3Y EXIMBC Bonds increased2BPs to 4.36% according to the transaction of 170307; 5/10Y Bond decreased 1BPand 3BPs to 4.42% and 4.47% according to the transaction of 170304 and 170303.

What’s more, AAA Local Government Bonds on 2/4/7Yreached the level of 4.17%, 4.26%, and 4.33% caused by market transaction.

Credit Bonds

The yields creditbonds showed significantly uptrend on short term side, while experienced mixpattern on long side. To be more specific, the yields of AAA CPamp;Notes on 3Mwent up 3BPs to 4.27%. The yield of AAA 6M increased 7BPs to 4.54%, and theyield for 1Y increased 9BPs to 4.66%. The yield for 3Y of AAA decreased 1BP to4.80%, while that of AAA 5Y Bonds slide 2BP to 4.90%.

The yields for FinancialBonds of Commercial Bank Yield, including CD, also presented uptrend in general.The spot of Financial Bonds of Commercial Bank on (AAA 7d/1M/3M/6M) changed +2BPs,0BP, 0BP, and +4BPs to 3.36%, 4.94%, 4.87%, and 4.87%.

The yields forUrban Construction Bonds decreased slightly. Specifically, the yield of UrbanConstruction Bonds AAA on 1/4Y changed +5BPs and -2BPs to 4.86% and 4.91%. Theyields of AA Bonds on 2Y/4Y changed 0BP and +1BP to 5.54% and 5.70%.

Exchange Market

In addition, therewas 6.4 billion of transaction on exchange bidding system, which was scale shrunkthan previous. The yields of highly rated corporate bonds went down by 2BPs; thoseof corporate bonds and enterprise bonds with middle and low ratings also stepup by 1BP. There was active transaction for 1280053 today.

(3)Data and Statistics

Foreign Exchange Data

The intermediatevalue of quotation of USDCNY was 6.7930 today, with CNY depreciating by 72BPs,ending the six continuous appreciations.

Money Market Data

On Thursday, theCentral Bank made a series of reverse repurchase of 30, 50, and 70 billion Yuanfor 7, 14 and 28 days. With 90 billion Yuan of reverse repurchase due, theCentral Bank made a net release of 60 billion Yuan.

Shibor went up asa whole today, with Shibor(1M) going up to 4.5146% by 8.42BPs.

Domestic Market Data

Stock Market:The stock marketwent up slightly as a whole today. By end of day, Shanghai composite index wentup to 3150.33 by 10.01 points (or 0.32%) and Shenzhen component index went upto 10148.72 by 38.85 points (or 0.38%). GEM index went down to 1794.75 by 5.1 points(or -0.28%).