(Bloomberg) -- Companies are pulling back on bond issuance in China’s domestic market, with deal cancellations rising to the highest level since April amid Beijing’s efforts to cool a recent debt rally.
So far this month, 82 yuan-bond deals worth 55 billion yuan ($7.7 billion) have been canceled, compared with 57 scrapped deals for all of July, according to Bloomberg-compiled data.
China Railway Construction Corp. and Datang International Power Generation Co. both said they would cancel their planned bond sales this month, citing market fluctuations.
China’s push to curb a government bond rally and put a floor under yields has also taken a toll on the corporate bond market. Corporate bond yields on three-year AAA rated company notes jumped around 10 basis points this month to date, and are poised for their biggest monthly jump since September 2023.
The People’s Bank of China has rolled out several recent measures to tamp down the rally, including regulatory checks on some investors that have helped damp trading activities.
China’s central bank on Monday kept the rate on its one-year policy loans, or the medium-term lending facility, at 2.3%. The decision underscores Beijing’s cautious approach in supporting the economy, even after seeing a rare contraction in bank loans amid weak demand.
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