C) Describe the problems the authorities are trying to solve in China

B) Sum up the text in 5-7 sentences and present them in class.

Ex. 11. a) Fill each gap with a suitable word from the box.

attention	discovered	take	ago
bonds	transaction	kind	dealing
market	traded (2)	graduates
line	pass	bond-trading
foreigners	free	traded

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 preceding 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 so 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:

to fund the deficit финансировать дефицит

to print money печатать деньги

ups and downs взлеты и падения

inside information внутренняя информация (для должностных лиц; не подлежащая использованию на рынке)

short selling «короткая продажа»

account n операционный период на бирже

in scripless form (зд.) в электронном варианте

ustodian n (зд.) хранилище ценностей

Дата добавления: 2014-11-29