Some money brokers, which facilitate transactions between buyers and sellers, informed clients that they had received notices from regulators to stop revealing bond prices publicly from Wednesday, according to market participants and media reports.
On Wednesday morning, social media chat rooms had already emerged on WeChat and QQ with pricing information.
Wind Information, the Shanghai-based financial information and services provider, said that it had created chat rooms on its platform for traders to manually match dealers. The company, however, declined to comment on queries from the Post.
One trader said that he could not use these chat rooms as his company’s rules prevent him from using mobile phones during trading hours and doing transactions in such groups.
Such chat rooms have served as important market-making channels for bond traders a few years ago, but they are inefficient, according to traders.
“If the bond market cancels the bond pricing services of Quebee, Wind and DM, simply put it – back to 2015,” wrote a user on Weibo, China’s Twitter.
“90 per cent of the groups are full [and will not let more people join],” said another post on WeChat.
While onshore traders rely on pricing information on platforms such as Quebee and Wind to do transactions, undertaking manual trading is like “buying bonds blindly” as traders are uncertain about the pricing information in the market, according to Chen at CSPI Ratings. “In the short term, it will have a huge impact, especially on liquidity and transactions of all non-government bonds.”
But he added the move may align China’s bond market more with international standards, as mature bond markets mainly make transactions through market makers who provide pricing, which is beneficial for market stability and efficiency in pricing discovery.
