Financial World News October 20th News from the Financial World and Oriental Jincheng jointly launched the "Bond Market Morning Post" column to provide you with the most comprehensive and timely bond market information.
[Content Summary] On October 19, the overall balance between the interbank capital markets was balanced, and the interest rates of major funds fluctuated slightly; current bond futures continued the trend of narrow fluctuation of , and the yield of long bonds rose slightly; Helenburgh China HLBCNH 11 The contract exemption and revision under 10/08/23 were initiated to solicit consent. Longguang Holdings failed to repay the "19 Longkong 01" installment payment on time and will raise funds within the 30-day grace period. Jindi Group announced that as of the end of September, the remaining bank credit can be granted 178 billion yuan, and publicly matured bonds are no longer required to repay the three major convertible bonds; the three major convertible bond indexes fell slightly, and the number of convertible bonds fell more and rose less; overseas, the yield on the 10-year US bond rose sharply by 13bp to 4.14%, and most European economies also rose sharply.
1. Bond market news
(I) Domestic news
[Li Jiachao: Promote the market to provide more investment tools denominated in RMB] Hong Kong Special Administrative Region Chief Executive Li Jiachao issued the first "Policy Report" of this SAR Government on October 19. Li Jiachao pointed out that Hong Kong currently handles about 75% of the global offshore RMB settlement. The SAR government will promote the market to provide more RMB-denominated investment tools, as well as stable and efficient exchange, exchange rate risk and interest rate risk management and other financial services, and optimize market infrastructure. The implementation of a series of interconnection arrangements previously announced by the China Securities Regulatory Commission has been fully implemented at full speed, including submitting the draft regulations within this year, exempting the stock trading stamp duty of the dual-currency stock market dealer transactions to optimize the RMB stock trading mechanism, and completing the preparations for the "Northbound Connect" of the interest rate swap markets between the two places as soon as possible; studying and optimizing the "Northbound Connect" of the bond connection, promoting more diversified issuance and trading of snack bonds, and continuing to discuss more interconnection expansion plans with the mainland; striving to establish an insurance after-sales service center in Nansha, Qianhai and other places in the short term, providing support to the residents of Greater Bay Area who hold Hong Kong insurance policies, and also taking an important step for the interconnection and interconnection of the Greater Bay Area insurance market. Promote Hong Kong to become the preferred financing platform for mainland and overseas governments and green enterprises, as well as build an international carbon market in Hong Kong, and support the Hong Kong Stock Exchange to continue to promote cooperation with Guangzhou financial institutions and other companies in the carbon market.
[The "security transfer" of second-hand houses in many places has been actually implemented] According to incomplete media statistics, since August this year, more than a dozen hot first- and second-tier cities such as Guangzhou, Shenzhen, Zhuhai, Kunming, and Nanjing have issued new policies for "security transfer" that may have been actually implemented. At the same time, among the cities across the country that have implemented the "security transfer" policy, all cities have adopted methods such as guarantees and notarization deposits to ensure the safety of transactions and mortgages. Recently, seven units including Zhengzhou Municipal Natural Resources and Planning Bureau, Zhengzhou Municipal Housing Security and Real Estate Administration Bureau, Zhengzhou Municipal Financial Affairs Bureau jointly issued the "Notice on Issuing the Implementation Plan for the Transfer of Existing Housing in Zhengzhou City", proposing that starting from November this year, the "Deposit transfer" model will be gradually promoted. Yan Yuejin, research director of the think tank center of the E-House Research Institute, said that this is a policy for transferring and registering second-hand housing transactions, and in fact it is also a policy for accelerating the circulation and transaction of second-hand housing. Behind this policy reflects the policy innovation ideas of reducing second-hand housing transaction costs and activate second-hand housing, which is also inspiring the policies of the national second-hand housing market.
[Many banks have deployed key tasks for the fourth quarter, and doing a good job in credit is an important task] According to media reports on October 19, several banks have held relevant meetings to deploy key tasks for the fourth quarter. Among them, doing a good job in credit is an important task at present. The main measures introduced include relaxing credit access conditions in key areas, reducing corporate loan interest rates, improving the quality and efficiency of investigation and review work, and making full use of differentiated policies. From the perspective of key areas, manufacturing, strategic emerging industries, inclusive small and micro enterprises, technology-based enterprises, green credit , etc. are the main directions of efforts.
[Shanxi Province Encourage private enterprises to participate in the construction and operation of municipal infrastructure such as water supply and garbage disposal] Recently, the Shanxi Provincial Department of Housing and Urban-Rural Development, the Provincial Development and Reform Commission, the Provincial Department of Finance, and the Provincial Department of Natural Resources jointly issued the "Implementation Opinions on Further Encouraging and Guided Private Enterprises to Participate in Municipal Public Utilities and Liberalizing the Water, Electricity and Heating Design and Construction Market". The "Implementation Opinions" clearly state that Shanxi Province will broaden its channels for participation. Private capital can directly invest in the construction and operation of urban gas, heating, and garbage disposal facilities through sole proprietorship and joint ventures. We will participate in the construction and operation of water supply, sewage treatment, garbage treatment, and urban and rural sub-environmental facilities through cooperation and shareholding. Private enterprises that meet the conditions can serve as professional operators and be entrusted to operate water supply, gas, heating, sewage and garbage disposal facilities. Private capital is encouraged to participate in the construction and operation of municipal public facilities through appropriate and reasonable models.
(II) International News
[ Federal Reserve Beige Book: Inflation is still at a high level, and it is even more pessimistic about the outlook for the US economy] On October 19, the Federal Reserve released the latest Beige Book. The Beige Book said that since the last report, the U.S. national economic activities have expanded moderately; however, the situation varies in different industries and regions. Among them, activity in four regions remained flat, and two regions saw a decline. The slowdown or weakness in demand was mainly attributed to rising interest rates, inflation and supply disruptions. The Beige Book mentioned that respondents became more pessimistic about the outlook for the U.S. economy as concerns about weaker demand grew. It is worth noting that the description of macroeconomic in October is "moderate expansion", which is consistent with the description of japanese Beige Book in July, but in the Beige Book in September, the description of US economic activity is "unchanged". In addition, the October Beige Book mentioned 13 "recessions" and the September Beige Book mentioned only 10 times. In terms of the labor market, although there are signs of slowing down in the US labor market, it is still tight and the pressure on wages to rise still exists. In terms of prices, inflation growth remains high despite some slowdowns in several regions. Beige Book expects that price increases will generally be moderate in the future.
[ euro zone's year-on-year adjustment CPI was revised down to 9.9%, still the highest level in history] On October 19, the European Statistics Office released data showing that the year-on-year adjustment CPI value of the euro zone's September coordinated CPI continued to climb to 9.9% from 9.1% in August, a 0.1 percentage point down from the initial value of 10%, barely avoiding the double-digit number, but it is still the highest level in history, with an expected 10%. In September, the euro zone's coordinated CPI rose by 1.2% month-on-month, the same as the initial value and expectations. Excluding energy and food with high volatility, the core-adjusted CPI in September rose 4.8% year-on-year, the same as the initial value and expectations, and remains a record high.
[UK September CPI exceeded expectations 10.1% year-on-year, returning to the highest level in 40 years ] Affected by food prices, the UK's September CPI and core CPI both unexpectedly accelerated upward, consolidating the Bank of England's expectations of hiking interest rates in in November 275 basis points. Data released on October 19 showed that the UK's September CPI was 10.1% year-on-year, expected 10%, the previous value was 9.9%, and the year-on-year growth rate returned to the highest level in 40 years; the September CPI was 0.5% month-on-month, expected 0.4%, and the previous value was 0.5%. Excluding the volatile food and fuel prices, the UK's core CPI in September was 6.5% year-on-year, expected to be 6.4%, and the previous value was 6.3%. The September core CPI was 0.6% month-on-month, expected to be 0.5%, and the previous value was 0.8%.
(III) Commodity
[International crude oil prices stopped falling and turned up , NYMEX natural gas price fell nearly 54%] On October 19, WTI November crude oil futures closed up 2.73 US dollars, rose 3.29%, at 85.55 US dollars per barrel; Brent 1 November crude oil futures closed up 2.38 US dollars, or 2.64%, at 92.41 US dollars per barrel. NYMEX November natural gas futures price continued to close 4.9% at $5.462 per million British thermal units.
[Turkish and Russia agree that Europe uses Russian natural gas through Turkey ] On October 19, local time, Turkish President Erdogan said in his speech that after consultation with Russia, Turkey agreed that European countries can use Russian natural gas through Turkey.In his speech, Erdogan said that Putin himself announced: "Europe can use natural gas through Türkiye." On October 13, Erdogan and Putin met during the Astana Asian Information Summit. Putin proposed to establish a natural gas hub in Türkiye, praising Türkiye as the "most reliable partner" in delivering natural gas to Europe. After that, Erdogan said Türkiye and Russia will jointly build a natural gas hub in Türkiye's Thrace region.
2. Funding side
(I) Open market operation
On October 19, Central Bank announced that in order to maintain the reasonable liquidity of the banking system, a 2 billion yuan 7-day reverse repurchase operation was carried out on the same day through interest rate bidding, with a winning interest rate of 2.0%. Wind data shows that 2 billion yuan of reverse repurchase expired on the same day, so completely hedged the amount of maturity on the same day.
(II) Fund interest rate
On October 19, the interbank capital market was generally balanced, and the interest rates of major funds fluctuated slightly: DR001 fell by 0.20bps to 1.116%, DR007 rose by 2.61bps to 1.506%, and interest rates for other terms also fluctuated slightly.
Data source: Wind, Oriental Jincheng
3. Bond market dynamics
(I) Interest rate bond
On October 19, current bond futures continued to fluctuate in a narrow range, and the yield of long bonds rose slightly. As of 20:00 Beijing time, the 10-year treasury bond active bond 220017 yielded 1.13bp to 2.7100%; the 10-year treasury bond active bond 220215 yielded 0.54bp to 2.8625%.
Data source: Wind, Oriental Jincheng
Bond bidding situation
Data source: Wind, Oriental Jincheng
(II) Credit bond
1. Secondary market transaction changes:
1 On October 19, the transaction prices of most real estate bonds were relatively stable, with the transaction price deviation of 9 bonds exceeding 10%, "19 Longkong 04" fell by more than 14%, "21 Jindi 04" and "18 Longhu 04" fell by more than 18%, "21 Jindi MTN007" fell by more than 62%; "20 Times 09" rose by more than 10%, "20 Times 02" rose by more than 13%, "21 Jindi 01" rose by more than 33%, "21 Bidi 02" rose by more than 70%, and "21 Sunac 01" rose by more than 138%.
On October 19, the overall transaction price of municipal bonds was relatively stable, with the transaction price deviation of two bonds exceeding 10%, "17 Zhangjiajie Special Bonds" fell by more than 12%, and "18 Tongren Travel PPN002" rose by more than 14%. .
2. Credit bond incident:
Helenburgh China : Initiate consent for the covenant exemption and revision under HLBCNH 11 10/08/23. The company announced that the company failed to repay the interest due on September 24, 2022 under the priority notes , which had an interest rate of 11.0% due on March 24, 2023 and the interest due on October 8, 2022 under the notes. As of the date of this announcement, the Company solicits the terms and conditions set out in the Consent Solicitation Letter dated October 19, 2022 for the proposed exemption and consent to the proposed amendment from the Notes. The solicitation of the bills will begin on October 19, 2022 and will expire at 5:00 pm (Hong Kong time) on October 26, 2022 unless the company extends otherwise or terminates early.
Shimao Group : The group issued an announcement stating that it plans to sell 45% of the equity in a complex project in Nanjing, and at the same time transfer the right to sell the debt. The buyer is China Cinda and Wugang Trust , with a total consideration of 1.75 billion yuan.
Sunshine City : The "20 Sunshine City ABN001 Priority A, B" bondholders' meeting is planned to be held on October 20.
Xinhualian Holdings :Bohai Bank issued an announcement on the subsequent progress of the default of Xinhualian Holdings Co., Ltd. in 2019 second phase ultra-short-term financing bonds (19Xinhualian Holdings SCP002). The issuer has not disclosed the debt resolution plan for "19Xinhualian Holdings SCP002".
Yuanjiang Urban Investment : The company announced that the controlling shareholder has been changed from the Yuanjiang Municipal People's Government to Hunan Yuanjiang Qionghu Investment Construction and Development Group, and the actual controller is still the Yuanjiang Municipal People's Government.
Sheyang Urban Construction : The company announced that its net assets at the end of 2021 were 7.887 billion yuan. As of the end of September 2022, the cumulative balance of new external guarantees was 3.573 billion yuan, accounting for 45.30% of the company's net assets at the end of 2021.
Anshun Xixiu Industrial Investment : The company announced that the company failed to pay the project funds in a timely and in full to Hangzhou Xiaoshan Company in accordance with the contract. The person to be executed was listed as the person to be executed, with the execution target of 6.5085 million yuan.
MCC Real Estate :Beijing Property Exchange shows that the Liaoning Branch of China Great Wall Asset Management Co., Ltd. plans to transfer the debt assets (trusted assets) of MCC Real Estate (Yingkou) Wanlong Plaza Co., Ltd. This transfer was entrusted by Huida Asset Trusteeship Co., Ltd., with a total amount of the debt of 270 million yuan, of which the loan principal was 188 million yuan and the interest was 82.0152 million yuan. The loan method is mortgage and guarantee. The claim has been litigated and has been applied for execution.
ABC Insurance : Fitch Rating adjusted the outlook for ABC International Insurance Co., Ltd.'s insurance company financial strength rating (IFS) from stable to negative, and confirmed that its IFS rating is ‘A-’ (strong).
Longshi Green Management : The company announced that the 10.75% priority notes exchange offer expired in 2022 has expired, and the existing notes with a total principal of US$132 million (about 78.05% of the outstanding principal amount of the existing notes) have been submitted in a valid exchange according to the exchange offer. New notes are expected to be issued at $119 million.
Longguang Holdings: Company announced that the company failed to raise enough funds to redeemed the installment repayment of "19 Longguang 01" on October 19, 2022. According to the "Notice of the Holders' Meeting" and the "Announcement of Resolution", if the Company fails to pay the principal and interest in a timely manner during the adjustment period of the redemption date, the Company will be given a grace period of 30 days. If the Company fully repays the principal and interest of this bond within the grace period, it does not constitute a default of this company on this bond.
Jindi Group: Company announced that as of the date of the announcement, the company has no domestic and foreign open market maturing corporate bonds and medium-term notes that need to be paid within the year. As of the end of September, Jinde Group's bank credit scale was nearly 270 billion yuan, and the remaining available bank credit scale was nearly 178 billion yuan. Among them, the new credit limit of banks was more than 20 billion yuan in 2022.
Country Garden Group : Company announced that its subsidiary Panyu Country Garden has fully redeemed the private placement of domestic corporate bonds "20 Panya 02" with a principal amount of 1.5 billion yuan, with a redemption amount of RMB 1.593 billion.
(III) Convertible bond
1. Equity and convertible bond index
[A shares three major stock index collectively closed down ] On October 19, the equity market entered a rebound adjustment stage, the three major stock indexes opened low and closed low, Shanghai Composite Index , Shenzhen Component Index, and ChiNext Index fell 1.19%, 1.43% and 0.86% respectively. Most of the Shenwan first-level industry index closed down. Except for transportation and coal, which closed slightly up 0.81% and 0.04%, the remaining industries weakened to varying degrees, including household appliances, agriculture, forestry, animal husbandry and fishery, and food and beverages falling by more than 3%.
[ three major convertible bond index slightly fell ] On October 19, the three major convertible bond market indexes fluctuated collectively after opening . CSI convertible bonds, Shanghai Stock Exchange convertible bonds, and Shenzhen Stock Exchange convertible bonds fell 0.39%, 0.31%, and 0.57%, respectively, which was less than the equity market. The turnover of in the convertible bond market on the day was 257.271 billion yuan, a decrease of 2.043 billion yuan from the previous trading day. The more the convertible bonds fell, the less the higher the price. Of the 432 bonds, 107 of them rose, 1 remained the same, and 324 bonds fell. The adjustment range of convertible bonds was significantly wider than the previous trading day, with nearly 100 bonds falling by more than 1%. Among them, Petty convertible bonds and Shangrong convertible bonds fell by 4.49% and 4.12% respectively due to the deep adjustment of underlying stocks, which was the highest decline. Among the rising bonds, boosted by the daily limit of the underlying stocks, Dazhong convertible bonds triggered the daily limit mechanism in the afternoon, closing up by 20.00%, Dongfeng convertible bonds and Watson convertible bonds closed up 15.04% and 9.29% respectively, and also performed well.
Data source: Wind, Oriental Jincheng
2. convertible bond tracking
This week, Huai 22 convertible bond is scheduled to be listed on October 20, Zhoubang convertible bond is scheduled to be listed on October 21, Baichuan to 2 is scheduled to be subscription on October 19, Faben convertible bond is scheduled to be subscription on October 21, and next week Yirui convertible bond, Liyuan convertible bond, Guanyu convertible bond is scheduled to be subscription on October 24, Taifu convertible bond is scheduled to be listed on October 25.
On October 19, Hospital Convertible Bond announced that it would not correct the conversion price downward, and if the amendment clause was triggered again within the next six months (i.e., from October 20, 2022 to April 19, 2023), if the amendment clause is triggered again, no downward correction plan will be proposed; Long 22 convertible bond announced that it would not correct the conversion price downward, and if the amendment clause is triggered again within the next six months (i.e., from October 20, 2022 to April 19, 2023), if the amendment clause is triggered again, no downward correction plan will be proposed.
On October 19, Shouxian convertible bond announced that it would not exercise its early redemption right, and if the redemption clause is triggered again within the next six months, the company will not exercise its redemption right; Chuanto convertible bond announcement is expected to meet the redemption conditions.
(IV) Overseas bond market
1. US bond market:
On October 19, concerns about the Federal Reserve maintaining a hawkish interest rate hike stance spread, and US bond yields generally rose sharply for each term. Among them, the 10-year U.S. Treasury yield rose sharply by 13bp to 4.14%, rising above 4.1% for the first time since July 2008. The more sensitive biennial yield to monetary policy rose by 12bp to a fifteen-year high of 4.55%.
Data source: iFind, Oriental Gold Cheng
On October 19, the 2/10-year US Treasury yield spread inverted slightly narrowed by 1bp to 41bp; the 2/30-year US Treasury yield spread inverted by 1bp to 40bp; the 5/30-year US Treasury yield spread inverted by 3bp to 20bp.
On October 19, the US 10-year inflation-protected Treasury bond (TIPS) gain and loss balance inflation rate rose slightly by 1bp to 2.42%.
2. European bond market:
On October 19, the ECB hawkish interest rate hike expectation pushes the yield on 10-year treasury bonds in most European economies to rise sharply. Among them, the yield on Germany's 10-year government bonds rose slightly by 9bp to 2.37%, while the yield on France and Spain's 10-year government bonds rose by 11bp and 10bp respectively, but the yield on Italy's 10-year government bonds fell slightly by 2bp. The yield on the UK 10-year Treasury bond continued to fall 7bp to 3.87%.
Data source: investing.com, Oriental Jincheng
Daily price changes in Chinese dollar bonds (as of 101919 4th closing)
Data source: Bloomberg, Oriental Jincheng compiled
This article comes from the financial industry
