| | 2017 2 23

2017
2017 MLF/OMO

7 20-30 2.8-2.9%10 3.6-3.7%
2017 43-44 2017

2017 1 Becky Liu +852 3983 8563

Becky.Liu@sc.com
24 MLF 10 2 3 Head, China Macro Strategy
Standard Chartered Bank (HK) Limited
OMOSLF
Jeffrey Zhang +852 3983 8540
20 Jeffrey.Zhang@sc.com
Fixed Income Strategist
Standard Chartered Bank (HK) Limited

OMO/MLF

2017 7 1 2.6% 20-30

2.8-2.9%1MLF/OMO 20-30 2
3MPA
2017 10
3.6-3.7%2017 3.3% 2017
10 3.6% 2.4%

2017 2016 64.3 81-82

42-43 18-21%
4.0-4.1 7.0-7.2

2017
2016 400 0.7% 700
1.2%

1 2017 2

7.0 10Y CGB

10 10Y CDB
10 10Y AAA
10AAA Price return
Coupon
FX

6.5 Total return in CNY

Total return in USD

10.34%
6.0 11% 8.18%
5.5 7.70%
6% 3.56%
5.0 2.57% 1.81%
4.5 2.36%
1%
4.0
3.5 -4% -4.40%

3.0
2.5 -9%
111 121 131 141 151 161 171 2014 2015 2016 2017F
wind

2017 https://research.sc.com


2017


2017
OMO/MLF

1 24 MLF 10 2 3
OMOSLF
2017 20

2016 CPI PPI 1
PMI 51.3 CSST
1 Economic Alert, 23 January 2017, China Services
sector maintains momentum
8.0% 8.1% CPI PPI 12 2.1%
5.5% 2.4% 6.7%

2017
GDP 2017 GDP 2016 6.7%
6.6% 2016 2017
PPI 6% 1%

3 4 7 2.8-2.9%
GDPCPI PPI ()
20 Real
GDPGDP CPI PPI R007 DR007 Average R007 fixing
R007
4.2

15
3.8
10
3.4
5

0 3.0

-5 2.6

-10
2.2
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

157 1510 161 164 167 1610 171 174

2017 2 23 2


7 1 2.6% 20-30 2.8-2.9%
4

1) 2017 MLF 20 OMO SLF

2)
On the Ground, 18 January
2017, China NCD re-classification to curb credit growth

3)

MLF OMO

1) OMO MLF

a. OMO 7 2.35%14 2.5%28 2.65%

b. MLF 3 2.75%6 2.95%12 3.1%

2) SLF 3.1%7 3.35%28 3.7%

3) 0.72% 6

1
2 1
3
2016 8 30 2017 1
1-8 2.1% 2.4% 5

5 2016 8 30 6 ()
()
3.0 Average
interbank rate Monthly
average SLF :
4.0
2.9 : 3.1%
2.8 3.5 7 : 3.35%
28 : 3.7%
2.7 3.0
2.6 2.5 MLF :
3 : 2.75%
2.5 2.0 OMO : 6 : 2.95%
2.4 7 : 2.35% 1 : 3.10%
1.5 14 : 2.50%
2.3 28 : 2.65%
1.0
2.2
2.1 0.5 ERR: 0.72%
2.0 0.0

1-Jan 7
2-Jan 14
3-Jan 28
4-Jan 3
5-Jan 6
6-Jan 1
7-Jan
161 164 167 1610 171

2017 2 23 3


TLF
OMO/MLF 1 20 100 TLF
28
28 OMO 2.55%
6,660 44%

MLF OMO
OMO/MLF
OMO
MLF

MLF OMO 5.4 MLF 3.6 OMO

1.8 2016
15.2 10.9 7
2016 / 15-
50% MLF 27.9 20.8
12
1

MLF
OMO

2017 2016
80% 90%2014 III
2014
60% 10% 2018 100%

7 MLF/HQLA ()
MLF HQLA

*
7,235 5,401 100% 7,235 5,401 100% 7,235 5,401
8,033 5,493 100% 8,033 5,493 100% 8,033 5,493
10,613 9,242 80% 8,491 7,393 85% 9,021 7,856
2,997 1,577 75% 2,248 1,183 0% - -
69 60 80% 55 48 85% 59 51
2,294 1,558 1,867 1,269 1,868 1,269
- AAA 1,044 709 85% 887 603 85% 887 603
- AA- to AAA- 1,151 782 85% 978 665 85% 978 665
- BBB- to A+ 4 3 50% 2 1 50% 2 1
- BB+ 95 65 0% - - 0% - -
844 624 0% - - 0% - -
*; wind

2017 2 23 4


2016
8

30
2016 M1 20%
OMO/MLF

0
2A 20% AA-
15%
2B BBB- AA+ 50%
HQLA

8
2015 2016
2015 Q3-2016
2016
150

140

130

120

110

100 2018

90 2017

80 2016

70
ICBC ABC BOC CCB BOCOM Huaxia SPDB CITIC PingAn CMB

2017 2 23 5


1) MLF
2)
3)

12
MLF

OMO/MLF

1 MLF
MLF MLF
AAA

AA- 95.7%
9,780 6,650
BBB- 95.9%
20 10

AAA AA-
AA-
BBB-

2 BBB-

4%
III

9
%
95.7%
AA- , 4.13%
A+ to BB, 0.18%

AAA, 45.50%

AAA- to AA-, 50.18%

wind

2017 2 23 6


2017 2017 43-44 2016
18-21% 43-44 36.5 18-21% 111
23

2017
43-44

4.0-4.1 2016 3.1 30-34%

7.0-7.2 2016 6.0 16-19%
3.6-3.7 2016 3.4 7-10%
17.0-17.3 2016 13.2 28-31%
11.4-11.7 2016 10.8 6-9%

2016 33%
2016 2016 64.3
9.4 2015 33% 10
2020 100
Special Report FICC, 1 February 2016, Chinas bond markets The start
of a golden age2017 81-82

43%
2016 2017 40% 27.7 2016 64.3
2017 43%
40% 2016
12

10 ()
120
Credits

2020 100
100 PFBs

NCDs

80 PBoC Bills

LGBs

60
CGBs

40

20

0
2020F
1998

2009

2017F
2018F
2019F
1996
1997

1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

2010
2011
2012
2013
2014
2015
2016

wind

2017 2 23 7


27.7

2.1 8% 2016 1.75 20%

2,420 1% 2,440 1%
2.1 7% 1.9 10%
16.7 60% 9.7 72%
6.5 24% 6.1 7%

11
2.7-2.8 GDP 3.5%
2017 2017 GDP 2016 3.0% 3.5%
2.7-2.8 2.7-2.8 2016 2.18
1.5-1.6 1.1-1.2 24-28% 2017
35% 40% 2017 1.5-1.6
2016 1.4 1.1-1.2 2016 7,800

30-34% 4.0-4.1
2017 2017 30-34% 2016 3.1
4.0-4.1 1.5-1.6 4.0-4.1 14

1) 1.5-1.6

2) 2.1 1.75

3) 2017
4,400 2016 2015 10 3
SDR
2016 6,230
2015 2,850

2017 2 2017
2017 1 3 5 7 10 63 2016
60 30 50 2016
78 91 13

11 2016 12 2016

50,000
45,000 20,000
40,000
35,000
15,000
30,000
25,000
10,000
20,000

15,000
5,000
10,000

5,000
0
0
2017F
2009
2008

2010

2011

2012

2013

2014

2015

2016
2016
2008

2009

2010

2011

2012

2013

2014

2015

2017F

wind wind

2017 2 23 8


2017 1.45-1.55
2016 14% 2017 13.45-
13.55 2016 12.0 GDP
2016 16% 17% 2017 GDP 6.6% GDP
0.9%

16-19% 7.0-7.2
2017
2017
2017 17 15 2017

7.0-7.2 2016 16-19% 16

1.1-1.2 2016 7,800

5,000-6,000 4,000
5.3-5.4 4.9

2015 3 2017
2,410 2016 2,440 2018
2019 8,290 1.3

2017 85% 2015

2014
2014 15.4 1.16
2015-16 8.1
2017 6.17 5.3-5.4
2018

13 63 14 30-34%

70
10Y
10 4,500
60 4,000
7Y
7 12
50 5Y 3,500
5
12
40 3Y
3 3,000

30 1Y
1 15 2,500
2,000
20 12
1,500
10
12 1,000
0
500
2017F
2010

2013
2005

2006

2007

2008

2009

2011

2012

2014

2015

2016

2017

0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F
wind

2017 2 23 9


12
3 On the Ground, 13 August 2015,
Chinas municipal bond market The next big thing2016
6.05 4.87 7,800
4,000

2017 2016
2016 30%
106% 2017 10% 1.6
7-10% 3.6-3.7

2016
13.2 2015 6.4

2017 2016 3.5 2.5 On
the Ground, 18 January 2017, China NCD re-classification to curb credit
growth 2017
2017
28-31% 17.0-17.3 2016 9.7 15.2
2017

2014
2017 2017 2015 38.5% 2016 15.1%
10% 10.0% 17 2017
20%

2017 11.4-11.7

2.2-2.3 2016 2.76 17-20%

15 GDP 2016 30% 16 16-19%

2017 39%
GDP

45% Total govt bonds

8,000
40% CGBs
7,000
35% LGBs

6,000
30%
5,000
25%
4,000
20%
15% 3,000

10% 2,000
5% 1,000
0% 0
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F
wind wind

2017 2 23 10


MTNs/CP/SCP 5.2-5.5
4.5 16-22%

8,500-9,000 5,960 43-50%

ABS 3.1-3.2
2.67 16-20%

Special Report, 1 February 2016,

Chinas onshore bond market The start of the golden age

2017
2017 2016 90% 2017 50%
50% 2016 10

100

66% 19
2017 2015 40.7%
2016 29.1% 18.6%

2017 2017

17 10% 18

14,000 Enterprise
bonds Enterprise
bonds
Corporate
bonds
Corporate
bonds 700 MTN/CP/SCP
//
12,000
Other
credits
MTN/CP/SCP
/ / 600
10,000
Other
credits 500
8,000 400
6,000 300
200
4,000
100
2,000 0
1611

1711
167

179
161

163

165

169

171

173

175

177

0
2011 2012 2013 2014 2015 2016 2017F
wind wind

2017 2 23 11


2016
17.2% 2016
31.3%

2016 2016
-142.8 20 2017

2017 2017 2016 8


70%

19 202017

450 Gross
issuance Redemptions
Net
issuance 400 Gross
issuance Redemptions
Net
issuance
400 300
350
300 200

250 100
200 66% 0
150
100 -100
50 -200
0
-50 -300
-100 -400
Q3-2016
Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q4-2016

Q1-2017

Q2-2017

Q3-2017

Q4-2017

Q4-2016
Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q1-2017

Q2-2017

Q3-2017

Q4-2017

wind wind

2017 2 23 12


2017 2017
2016
2015 34 36
41 59 AAA 60%
21

2017 2017
400 700 2016 400 700 2017
1.2% 2016 0.7% 0.5

212016
2015 2016
AAA AA+ AA AA- A+ A A- BBB+
AAA 98.4% 1.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
AA+ 7.9% 88.6% 2.5% 0.7% 0.0% 0.0% 0.0% 0.2%
AA 0.0% 5.9% 92.5% 1.2% 0.0% 0.0% 0.0% 0.3%
AA- 0.0% 0.0% 15.9% 79.7% 2.3% 0.4% 0.4% 1.3%
A+ 0.0% 0.0% 1.7% 20.0% 60.0% 10.0% 0.0% 8.3%
A 0.0% 0.0% 0.0% 0.0% 36.4% 27.3% 0.0% 36.4%
A- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 75.0% 25.0%
BBB+ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0%
wind

22 60% AAA 23
% /

100% 80 default
amount 1.4%
AA-, 3.11% 72.5
90% default / redemption (RHS)
/
AA, 20.95% 70 1.2% 1.2%
80% default / average outstanding (RHS)
/
60
70% 1.0%
AA+, 17.16%
60% 50
40.4 0.8%
50% 40 0.7%
40% 0.6%
30
30% AAA, 58.54% 0.4%
20 0.3%
20% 12.2 0.3%
10% 10 0.2%
1.3 0.2%
0% 0.0% 0.1%
0 0.0%
2012 2013 2014 2015 2016 2014 2015 2016 2017F
A+ 0.24% wind

wind

2017 2 23 13


2016 10

2,000
10-20%

2016 12

70%
40%
AAA AAA

2015
2016 10
12.7 2015 390
1%

2017 2
2017
10%

2017 5

2017 2 23 14


1 (%)

2015 2016 2016

ICBC 145.1 144.0 133.1
ABC 127.5 138.6 137.8
BOC 119.3 118.0 117.5
CCB 132.9 122.3 117.0
BOCOM 115.6 112.5 116.4
PSBC 112.5 184.9 NA

CEB 84.8 93.7 NA

Huaxia 75.5 80.97 82.3
Guangfa
* PingAn 140.8 120.4 96.4
CMB 113.6 105.3 96.5
SPDB 78.3 89.7 77.1
Industrial 90.5 82.9 NA
Minsheng
Evergrowing
Zheshang
CBNB
CITIC 87.8 104.7 89.6
* 2012

2017 2 23 15


22017

() ()
1 01/04/17 1 5 07/12/17 1
10 01/04/17 1 7 07/19/17 1
5 01/11/17 1 30 07/21/17 2
3 01/18/17 1 3 07/26/17 1
7 01/18/17 1 1 08/02/17 1
1 02/08/17 1 10 08/02/17 2
10 02/08/17 1 5 08/09/17 1
5 02/15/17 1 7 08/16/17 1
30 02/17/17 2 30 08/18/17 2
3 02/22/17 1 3 08/23/17 1
7 02/22/17 1 1 09/06/17 1
1 03/01/17 1 10 09/06/17 2
10 03/01/17 1 5 09/13/17 1
5 03/08/17 1 30 09/15/17 2
7 03/15/17 1 5 09/18/17 1
3 03/22/17 1 3 09/20/17 1
1 04/05/17 1 7 09/20/17 1
10 04/05/17 1 1 10/11/17 1
5 04/12/17 1 10 10/11/17 2
7 04/19/17 1 5 10/18/17 1
30 04/21/17 2 30 10/20/17 2
3 04/26/17 1 3 10/25/17 1
1 05/03/17 1 7 10/25/17 1
10 05/03/17 1 5 10/30/17 1
5 05/10/17 1 1 11/01/17 1
3 05/17/17 1 10 11/01/17 2
7 05/17/17 1 5 11/08/17 1
50 05/19/17 2 7 11/15/17 1
1 06/07/17 1 50 11/17/17 2
10 06/07/17 2 3 11/22/17 1
5 06/14/17 1 5 11/27/17 1
30 06/16/17 2 1 12/06/17 1
7 06/21/17 1 10 12/06/17 2
3 06/28/17 1 5 12/13/17 1
1 07/05/17 1 30 12/15/17 2
10 07/05/17 2 3 12/20/17 1
7 12/20/17 1

2017 2 23 16


(1) /
(2)

/SCB

SCB

SCB SCB /
/
SCB /SCB /

SCB
SCB
SCB
SCB

SCB https://research.sc.com/Portal/Public/TermsConditions
SCB
scgr@sc.com SCB
:
SCB Prudential Regulation AuthorityFinancial Conduct Authority
2004/39/EC 2004/39/EC SCB
246833ARBN0975717782001Cth 761G 761GA
SCB

Standard Chartered Bank Botswana Limited 46.04 6

SCB (CVM) 483/10 SCB

CBRCSAFEPBoC Standard Chartered Bank Germany Branch
(BaFin)

Standard Chartered Bank, India Branch (SCB India) SCB

RBISEBI
https://www.sc.com/in/india_result.html SCB India

FIEL FIEL
Standard Chartered Bank Kenya Limited
Standard Chartered Bank Korea Limited Standard Chartered Bank (Macau
Branch) Standard Chartered Bank Malaysia Berhad
Standard Chartered Bank Malaysia BerhadStandard
Chartered Bank (Mauritius) 2005
2008 5C
Standard Chartered Bank ()1989
Standard Chartered Bank (Philippines)
(Telephone No. (+63) 708-7701, Website: www.bsp.gov.ph)
9 10
SCB / Standard Chartered Bank (Singapore) Limited 289
SCB Standard Chartered Bank (Singapore) Limited
SCB 2002 37 8 SCB 2005
NCRCP4
Standard Chartered Bank UAE 2008
48/r DIFCSCB
FXGlobal FX 1934
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Standard Chartered Securities (North America) Inc.
1095 Avenue of the Americas, New York, N.Y. 10036, US + 1 212 667 0700(A)
(B)
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1a(18)Standard Chartered Bank Zambia Plc

387

2017 Standard Chartered Bank Standard Chartered Bank /

2017 2 1 2017 2 23 06:15
China onshore fixed income market 2017 outlook

2017 2 23 17