While the yields on corporate bonds.....>

CHINA PRESS: While the yields on corporate bonds have remained relatively

stable, treasury bond yields have risen to their highest level this year, the

China Securities Journal noted in a report Wednesday. The yield on 10-year

treasury bonds broke 3.7% Monday and has continued to rise, though the spread

with corporate bonds is still low. The divergence of the yields indicates that

market expectation on government policies is not as pessimistic as it was

before, the report argued. Net issuance of treasury bonds will total CNY614.46

billion in the fourth quarter, a record high level, which will further pressure

yields. In contrast, the demand for corporate bonds is stable and qualified

companies remain reluctant to float new issues, the report noted. The bond

market will continue its correction as new regulations are launched and

liquidity tightens, so the bond yields have not yet peaked, the report warned.

(China Securities Journal)