Key China money market rate up ahead of new issues

* Market liquidity expected to drop ahead of holiday

* Key 7-day repo rate seen rising to 1.6 percent next week

* Bill and bond yields expected to continue moving sideways

SHANGHAI, Sept 18 - China's benchmark weighted average seven-day repo rate jumped 7.63 basis points on Friday morning as investors prepared funding for a slew of share and debt issues next week.

The barometer of liquidity supply on China's money market rose to 1.5430 percent at midday from 1.4667 percent at the close on Thursday as the market is also poised for a steep increase in demand for short-term funds ahead of an eight-day holiday for China's National Day starting from Oct. 1.

"Although the market has generally seen a decent supply of money for the bulk of this year, a slew of new issues next week plus the coming holiday may cause a temporary shortfall," said analyst Su Zhenhua at Taikang Asset Management Co in Beijing.

"But with the expection of short-term money rates, bill and bond yields should not move much as investors don't expect major changes on the macroeconomic front, including monetary policy, in the short term."

Dealers said they expected the seven-day repo rate to rise to around 1.6 percent next week partly because of an upcoming medium-sized stock initial public offering (IPO).

China International Travel Service Corp is launching a Shanghai IPO worth about 1.7 billion yuan ($249 million) to fund expansion, including setting up new offices.

The country's top tourist agency will take institutional subscriptions on Tuesday and retail subscriptions on Wednesday.

China's Ministry of Railways will auction 30 billion yuan of fixed-rate bonds on Monday to fund new railway projects, issuing the bonds on Tuesday and Wednesday.

Among other issues, money for China Development Bank's (CDB) 20 billion yuan 10-year floating-rate bonds, auctioned on Friday, will be paid on Wednesday.

China's debt yields were largely steady on Friday, with the short end of the yield curve gaining slight support from a good sale of a new government bill, but the long end being slightly pressured by poor demand from CDB's long-term bonds.

The benchmark indicative one-year central bank bill yield, which moves inversely with bill prices, edged down 0.18 basis point to 1.7682 bid, while the yield of the most active five-year government bonds slipped 0.04 bp to 2.8630 percent bid, according to Reuters Reference Rates.

The Ministry of Finance auctioned 15 billion yuan of 182-day bills on Friday at a yield of 1.3390 percent. The result was down from a yield of 1.40 percent at the previous auction of such bills with the same tenor on Aug. 21.

But the indicative 15-year bond yield on the secondary market rose 0.18 bp to 3.9203 percent bid and the 20-year bond yield added 0.14 percent to 4.0179.

Following are yields based on Reuters Reference Rates (bid):

CHINA YIELD CURVE (pct)

Sept 18 Pvs Day Change 7-day repo 1.5430 1.4667 + 7.63 bps 7-day SHIBOR 1.5158 1.4654 + 5.04 bps 90-day CB bill 1.3291 1.3285 + 0.06 bps 1-year CB bill 1.7682 1.7700 - 0.18 bps 5-year Tsy 2.8630 2.8634 - 0.04 bps 15-year Tsy 3.9203 3.9185 + 0.18 bps Note: Repo rate is weighted average.

To see SHIBOR rates, please click

For information on reference rates for central bank bills, treasury bonds and sovereign bonds, please click.

To see a general guide to contributed price data, news and analysis, please click. ($1 = 6.83 yuan)