Weekly report of the bond market of the Exchange: the market thrust is temporarily terminated
Lin Chaohui, Huatai United Securities Co., Ltd Analysis of bond market trend: The stimulus effect of the reduction of reserve ratio on the capital market this week is mainly in the bond market. The stock market continued to decline significantly throughout the week, and the yield of inter-bank credit products declined significantly. Under the completely positive market environment, the bond index of the exchange rose strongly and all of them reached the highest weekly increase since this year, The average yield of the representative securities of the exchange decreased by about 25BP compared with last week, and its cumulative upward range since September 2010 was close to 50BP, which was lower than the adjustment range of inter-bank credit products. The overall weakening of various economic indicators in April interrupted the initial rebound momentum of the economy in March, and the stock market has also stopped the rise launched in early April and continued to fall back. On the other hand, the latest reduction of the reserve ratio will help to play the role of economic underpinning when the economy continues to reach the bottom. Generally speaking, the upward driving force of the stock market is still insufficient, However, the policy has sufficient resistance to the downward trend of the stock market. After the stock market has dropped significantly in the past two weeks, it is expected that it will focus on consolidation in the near stage, and its impact on the bond market of the exchange will also be relatively neutral. From the performance of the inter-bank bond market, in the context of the sharp decline in the overall yield of bonds this week, especially the decline in the yield of short-term and medium-term varieties, which is more than the rate cut once (25BP), the decline in bond interest rates has taken on a one-step trend, and the subsequent promotion of price comparison on the bond market of the exchange will also weaken. In addition, from the perspective of the expansion of the bond market, the issuance of corporate bonds and corporate bonds of the Exchange has slowed down recently, but under the main tone of the joint efforts of the regulators to promote the leap forward development of the credit bond market, it is expected that the accelerated expansion of high-yield varieties will run through the whole year and the medium-term process in the future, and the momentum of the expansion of the primary market will also restrict the downward range of the secondary market yield. Taking the above factors into consideration, this week's promotion of stock and debt on the bond market of the Exchange has come to an end, and the varieties of the Exchange are also expected to be dominated by sideways fluctuations. Against this background, we still suggest that the investment in the bond market of the Exchange can be mainly based on the medium and long-term capital allocation and holding rather than short-term trading spread factors. At present, it can be preferred to allocate in the primary market rather than the secondary market to pursue growth, The priority allocation varieties are mainly urban investment bonds issued by issuers whose administrative level is not lower than that of prefecture level cities, and medium rated corporate bonds with good qualifications and shorter maturities. Suggestions on investment strategy of secondary market: this week, we mainly recommend 12 Panjin construction bonds in terms of primary market varieties. In terms of the secondary market, the 08 Changxing Bond and 08 Tieling Bond, which were our early investment observation products, rose strongly with the market this week. At present, the exercise period of the two bonds is about 1.5 years, and the exercise yield further drops to a low level of about 5.0%. It is suggested that there is no need to pursue growth in the secondary market.
