Reporter Liu Qi and Han Yu

On May 24, the 20-year ultra long term special treasury bonds were launched for the first time, with a total face value of 40 billion yuan in competitive bidding. The auction of the current treasury bonds ended on May 27 for distribution, and went public on May 29. According to the issuance arrangement of ultra long term special treasury bonds announced by the Ministry of Finance, 20 year ultra long term special treasury bonds were issued once a month from May to November, a total of 7 times.

It is worth mentioning that on May 22, the first issue of ultra long term special treasury bonds (30-year bonds) issued this year was officially listed on the secondary market. This bond continued the hot subscription in the primary market, and the active bidding and trading on the first day of the secondary market also attracted the attention of the industry. So, what is the expected impact on the capital, bond market and equity market of the ultra long term special treasury bonds scheduled to be issued this year? The reporter of Securities Daily interviewed many experts in the industry.

Limited impact on capital

It is reported that the term of this year's ultra long term special treasury bonds includes 20-year, 30-year and 50-year bonds, all of which pay interest half a year. The 20-year term is issued from May to November, with two initial issues and five renewals; the 30-year term is also issued from May to November, with three initial issues and nine renewals; and the 50-year term is issued from June to October, with one initial issue and two renewals. Previously, on May 17, the initial issuance of 30-year ultra long term special treasury bonds was completed. May 24 is the first tender issue of 20-year super long term special bonds, and the 50 year super long term special bonds will be issued as early as June 14.

In the view of analysts, the issuance of ultra long term special treasury bonds has limited impact on capital. Mingming, the chief economist of CITIC Securities, told the reporter of Securities Daily that the issuance cycle of ultra long term special treasury bonds is long, the issuance rhythm is gentle, and the single period scale will not be too large, which will help reduce the impact on capital and smooth the fluctuation of market interest rates.

According to the data, the 30-year ultra long term special treasury bonds first issued on May 17 were listed on the secondary market on May 22. According to the data from www.chinamoney.com, DR007 (7-day weighted average interest rate for repo of deposit institutions in the inter-bank market) reported 1.8421% on the same day, which remained near the current short-term policy interest rate, without significant fluctuations.

From the perspective of the impact of the bond market, Feng Lin, director of the research and development department of Orient JC, told the Securities Daily that since this year, the supply of government bonds has been slow and the demand for institutional debt distribution has been strong, deepening the "asset shortage" situation in the bond market. The issuance of ultra long term special treasury bonds can increase the supply of safe assets, make the relationship between supply and demand in the bond market more balanced, and the "asset shortage" situation may be alleviated.

"This year, the issuance cycle of ultra long term special treasury bonds is relatively long and the pace is relatively gentle, which smoothes the supply pressure that may be caused by their issuance on the bond market. In addition, the market has long expected the supply pressure that may be caused by ultra long term special treasury bonds, so the incremental negative impact of subsequent issuance on the bond market will be relatively limited." Feng Lin further said.

In the opinion of Wu Chaoming, vice president of the Financial Information Research Institute, the issuance of ultra long term special treasury bonds will also help promote the market-oriented financial reform of interest rates.

Wu Chaoming analyzed that the issuance of 20-year ultra long term special treasury bonds will help improve China's interest rate curve and provide pricing reference for ultra long local bonds. At the same time, its issuers provide long-term safe assets to the market, which helps to alleviate the "asset shortage" problem and promote the overall operation of long-term treasury bond yields within a reasonable range that matches the long-term economic growth expectations. In addition, the increase in the supply of ultra long term special treasury bonds may push up long-term interest rates, but the increase in demand may offset some of this impact.

Wen Bin, chief economist of China Minsheng Bank, said in an interview with the Securities Daily that this year it plans to issue ultra long term special treasury bonds for several consecutive years, releasing a signal that positive fiscal policies will better support economic development, which will help ease the pressure on local finance and debt, support the momentum of infrastructure growth, and promote the continued return of economic growth to potential levels, The formation of major projects also helps to reduce the cost of economic and social operation, improve the efficiency of economic operation, and optimize the supply structure.

There is still room for reducing reserve requirements and interest rates

On May 13, the State Council held a mobilization video conference to support the deployment of "dual" construction, which pointed out that "issue and make good use of ultra long term special national debt, and do a good job in supporting the implementation of major national strategies and the construction of security capacity in key areas with high quality, so as to provide strong support for promoting Chinese style modernization" "We should make overall use of conventional and unconventional policies, strengthen the coordination of financial and monetary instruments, and guide more financial resources into the real economy". The industry expects that the monetary policy will also be supported during the issuance of ultra long term special treasury bonds.

"At present, considering the pressure of bank debt and the economic recovery, there is still room for reserve ratio reduction and interest rate reduction within the year, but the specific time point needs to be judged comprehensively in combination with domestic monetary and credit environment and the rhythm of monetary policy of overseas economies," Mingming said.

Wu Chaoming also believes that there is still room for reducing reserve ratio and interest rate, and he expects that the reduction of reserve ratio will take the lead.

"The probability of RRR reduction in the second quarter is relatively high. On the one hand, it is to cooperate with the fiscal policy in the second and third quarters to release long-term low-cost funds for banks; on the other hand, it is the signal that there is still room for RRR reduction from the central bank level frequently since the beginning of the year." Wu Chaoming said that the necessity of interest rate reduction is still strong, but it is expected that the timing will be delayed.

Wu Chaoming further analyzed that, first, the yield of domestic 10-year and 30-year government bonds fell rapidly in the early stage, and is currently at a low level, which is conducive to the low-cost issuance of ultra long-term special government bonds, and the need for the central bank to cut short-term interest rates is not strong. Second, the goal of internal balance is tending to ease, the momentum of economic growth has stabilized, inflation is expected to pick up moderately as a whole, and the level of real interest rates is expected to decrease. Third, the constraint on the objective of external equilibrium has been strengthened, mainly because the time point of interest rate reduction by the Federal Reserve has been significantly delayed and the rate of interest rate reduction has been significantly reduced, which objectively creates certain disturbance and constraint on the domestic interest rate policy.

Wen Bin believes that the short-term impact on liquidity caused by the decentralized issuance of ultra long term special treasury bonds will be significantly lower than expected, so the probability of the central bank implementing the RRR reduction will also be reduced, or more efforts will be made to stabilize the volatility of capital through MLF (medium-term lending facility) volume increase and OMO (open market operation) net release.

In fact, on May 15, the Central Bank renewed the MLF expiring this month at an equal parity rate, ending the shrinking renewal model of the previous two months.

"Considering the central bank's high attention to fund idling and long-term treasury bond interest rates, it is less likely that the RRR will be reduced in the short term only to cooperate with the issuance of special treasury bonds." Wen Bin said that from the estimated net financing amount of government bonds, the liquidity pressure from May to October was fair, and the liquidity pressure from November to December was relatively high due to the low maturity of treasury bonds, The central bank may reduce reserve requirements.

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