Editor's note: The so-called "asset shortage" in this round is very similar to the situation around 2016.But the difference is that in 2016, there was a comprehensive shortage of assets caused by "water release", while this year is more about the scarcity of optional assets under the influence of risks.The increase in the supply of local government bonds in June may lead to increased supply pressure.In addition, once the liquidity of the bond market reverses, the "asset shortage" is likely to end early.
Securities Times reporter Sun Xiangfeng
The term "asset shortage" is becoming more and more popular.
Since the beginning of this year, the subscription of newly issued bonds has increased significantly. The subscription/issuance ratio of new bonds has risen from around 1.5 in the past to more than 2. The subscription ratio of some urban investment bonds has reached 60 times or even higher.At the same time, the yield of credit bonds has declined as a whole. As of the end of May, the overall spread of Chengtou bonds has fallen by more than 20 basis points from the beginning of the year.In order to strive for a lower issuance interest rate, many high-quality companies have cancelled bond issuance.
"The core of the cause of the 'asset shortage' is abundant liquidity, declining financing demand, and reduced asset supply in the overall market. In the same period, loose funds will inevitably lead to assets represented by credit bonds becoming scarce varieties, with more funds, less assets, and less credit. The decline in bond yields may become the norm." Gao Yuan, chief analyst of credit and mixed assets at Debon Securities, told the Securities Times reporter.
Liquidity easing disrupts markets
Since the beginning of this year, market funds have been significantly loosened.In April 2022, the pledged repo rates of depository institutions, DR001 and DR007, and the inter-bank pledged repo rates, R001 and R007, will basically remain within the range of 1.3% to 2.0%, far below the policy interest rate.In the latest trading day, Shibor3M, which represents the cost of funds for banks, has fallen to a low of 2.155% on May 13, and the latest market quotation stayed at 2.0%, which is close to the lowest level in two years.
"The reason for the recent 'asset shortage' of credit bonds can be seen from both supply and demand." Yu Lifeng, a senior analyst at the Research and Development Department of Oriental Jincheng, pointed out that on the demand side, since April, the policy of stabilizing growth has continued to increase, and monetary policy has continued to increase. The margin is loose, the liquidity is relatively abundant, and the demand for capital investment increases; secondly, the decline in real estate sales and the impact of a new round of epidemic, the downward pressure on the economy increases, investors are more cautious, prefer fixed-income assets, and increase the investment demand for bonds Finally, the A-share market has undergone significant adjustments since the beginning of the year, and funds have flowed out of the stock market into the bond market, further increasing the demand for bonds, including credit bonds.
On the supply side, the credit bond market has shrunk to a certain extent.Since April, the supply of credit bonds has decreased, and the net financing of credit bonds in the month decreased by 15% year-on-year, of which the net financing of urban investment bonds decreased by 39% year-on-year.Wind data shows that in May this year, the cumulative issuance of credit bonds was 679.131 billion yuan, and the net financing amount was -7.171 billion yuan.
Wu Zhiwu, senior director of the research and development department of CSI Pengyuan, also pointed out that there are three main reasons for the current "asset shortage": First, the market liquidity is loose, the monetary policy remains loose, and the market liquidity is sufficient. Demand has risen; second, the risk of the stock market has risen, and funds need to flow into the bond market from the stock market for hedging; third, the supply of fixed-income assets has decreased.Taking credit bonds as an example, in the first five months of this year, the number and scale of credit bonds issued by non-financial enterprises fell by 6.38% and 4.37% year-on-year, and the supply shrank.
After the balance of supply and demand was broken, funds competed for some high-quality bonds, and the over-subscription ratio of some short-duration urban investment bonds in the primary market exceeded a new high.For example, not long ago, the subscription ratio of urban investment bonds in a certain place in Jiangsu was as high as 60 times during the issuance process.Qin Han, chief fixed income analyst at Guotai Junan Securities, pointed out that "the subscription of newly issued bonds has increased significantly, and the subscription/issuance ratio of new bonds has risen from around 1.5 in the past to more than 2."
Issuer up for grabs
The "asset shortage" is reflected in the data as a decline in the yield of credit bonds.Wind data shows that at the beginning of the year, the overall median interest spread of urban investment bonds was 79.45BP, but by May 31, this data was only 58.87BP, a drop of 20.58 basis points during the period.
According to CICC's statistics on intermediary transaction data, the market transaction yields fell across the board last week.AAA, AA+, and AA and below for 1 year and below are downgraded by 8bp, 7bp and 14bp respectively; 1~3 years AAA, AA+ and AA and below are downgraded by 5bp, 5bp and 38bp respectively; 3~5 years AAA, AA+ and AA and below The following ratings are down 4bp, 25bp and 1bp respectively.The yields of each grade of CICC Ratings have declined, except for 1-4 tranches of 1 year and below, and 1-2 tranches of 1 to 3 years.
With the shortage of high-quality credit bond assets, the issuance interest rate in the primary market also showed a significant downward trend, and many issuers chose to postpone the issuance and sell at a price.
Zheshang Zhongtuo was originally scheduled to publicly issue corporate bonds to professional investors on May 31, 2022, but the company announced a few days ago, considering the company's capital arrangements and cost considerations, after negotiating with the lead underwriter and investors, decided to cancel this time. issued.Subsequent issuance plans will be announced separately.
Coincidentally, Gezhouba also announced not long ago that, taking into account the market situation, the issuer and the lead underwriter have reached consensus and decided to cancel the issuance of 22 Gezhou Y1, and the subsequent issuance time will be determined separately.
Wind data shows that a total of 109 bonds have been canceled during the year, and the cumulative amount of canceled issuance has reached 93.43 billion yuan.
In recent years, there has been a wave of cancellations in the primary market of credit bonds. For example, in March-April 2017, the fourth quarter of 2020, and March-April 2021, there have been cancellation events.The wave of cancellations in 2017 was the largest cancellation event in the past five-year cycle. A total of 239 credit bonds were cancelled from March to April of that year, corresponding to a scale of 196.99 billion yuan; in the fourth quarter of 2020, a total of 249 credit bonds were cancelled. The corresponding scale is 183.643 billion yuan; from March to April 2021, a total of 163 credit bonds were cancelled, with a corresponding scale of 109.110 billion yuan.
In terms of bond types, the number of medium-term issuance cancellations is the largest, and the proportion of chengtou cancellations in multiple cancellations is more than half; in terms of grades, the credit ratings of the subjects in previous cancellations are mostly AA+ or AA; in terms of regions, There are many issuing entities located in Jiangsu, Shandong and Beijing; in terms of nature, the main entities that cancel the issuance are state-owned enterprises.
The chief economist of CITIC Securities clearly pointed out that in terms of reasons, the cancellation of the previous rounds of issuance was more of a last resort for the issuer.Take the fourth quarter of 2020 and March to April 2021 as examples.In the fourth quarter of 2020, a new wave of credit bond defaults swept the credit bond market with its suddenness and concentration, causing a huge impact.After the "Yongmei Incident", the market's belief in state-owned enterprises has weakened, and the credit spread center has risen significantly. Among them, the 3-year AA+ and AA short- and medium-term bill spreads have broken through the highs caused by the impact of the new crown pneumonia epidemic in 2020, indicating that the market has a strong interest in medium-grade credit The strong risk aversion of bonds has led to the increase in the financing cost of the main body and the increase in the number of cancelled issuances.After the "Yongmei Incident", the regulators have tightened the supervision of the credit market and raised the threshold for issuance review, which has led to an increase in the difficulty of issuing credit bonds, resulting in an increase in the scale of canceled issuance of credit bonds from March to April 2021.
It is worth noting that the cancellation of this round of issuance is obviously more of the initiative of various issuers.From the data point of view, among the entities that cancel the issuance, 48 entities have AAA ratings.
"In this round of cancellation of issuance, the credit rating of the main body is relatively high, and most of the enterprises are state-owned enterprises. We believe that the possibility of issuers being forced to fail to issue bonds is low, and there are many cases of actively choosing to cancel the issuance. Since last year, the central bank has continuously With the implementation of monetary easing measures, the market's expectation for liquidity to remain loose has strengthened, and even the possibility of maintaining easing in the future has been expected as early as the switch between the first and second quarters. , in order to reduce the comprehensive financing cost." Mingming pointed out.
The distribution situation of some issuers also confirms this statement to a certain extent.On May 25, Huafu Securities issued an announcement on the adjustment of the company's public issuance of subordinated bonds (second tranche) to professional investors in 2022. Due to the major changes in the bond market, Huafu Securities' current bond issuance range has been adjusted. is 3.00%~4.00%.Earlier data from Huafu Securities' public issuance of subordinated bonds (second tranche) to professional investors in 2022 showed that the scale of this tranche will not exceed 1 billion yuan, and the interest rate range will be 3.20%~4.20%.Obviously, Huafu Securities lowered the interest rate range for this issue.In the end, Huafu Securities determined the coupon rate of the bond to be 3.33%.
How long will the "asset shortage" last?
In terms of the reasons for its formation, this round of "asset shortage" is somewhat similar to the more significant "asset shortage" in history, such as 2016, but there are more differences.
In an interview with a Securities Times reporter, Mingming admitted that this round of so-called "asset shortage" is very similar to the situation around 2016, but the difference is that in 2016, there was a comprehensive shortage of assets caused by "release of water", and this year there are more It is the scarcity of optional assets under the influence of risk.The risk of optional varieties rotates, so in terms of investment, the current optional credit bond varieties are actually shrinking, resulting in an "asset shortage".
Yu Lifeng also pointed out that the similarities between this round of "asset shortage" and the situation around 2016 are that during the period, the A-share market fluctuated greatly and the liquidity environment was relatively loose.However, the biggest difference between the two is that the "asset shortage" around 2016 was mainly a demand-driven "comprehensive asset shortage" - the substantial expansion of bank wealth management products, the large increase in the scale of outsourcing, the substantial increase in institutional risk appetite, and the market's high The rising demand for income assets pushed the yields of high-, medium- and low-rated credit bonds down across the board.
Yu Lifeng believes that the current "asset shortage" is mainly "structural asset shortage", and the risk appetite of institutions has not increased significantly, but there is a situation where relatively abundant funds are chasing a limited supply of deterministic assets.The so-called deterministic assets include mid-to-high-rated bonds and some low-rated bonds that benefit from stabilizing growth policies in the short term, while most low-rated bonds have limited credit spread compression and are still at historically high levels.
Institutions also have different views on how long the "asset shortage" may last.Gao Yuan believes that social financing and M2 are similar to the front and back of a coin. When the growth rate of social financing exceeds M2, there will be "more surface and less water", and the interest rate of credit bonds may rise; when the growth rate of social financing is lower than M2, it will be "less surface." “There is a lot of water,” and the probability of credit bond interest rates going down is high.If the growth rate of M2 always exceeds the growth rate of social financing, then the "asset shortage" may continue.
"When the liberalization of credit really exerts its strength and the growth rate of social financing rebounds significantly, the phenomenon of 'asset shortage' will ease. Investors should do a good job of profit-taking for credit bond investments at present, and short-term credit bonds are recommended to be safe. In the case of continuous loose funds, leverage operations may be sustainable, and appropriate leverage to extend the duration may be the main strategy for credit bond investment." Gao Yuan said.
Yu Lifeng pointed out that the supply of credit bonds will increase in June, the scale of local bonds to be issued is still high, and the credit policy will gradually take effect, and the supply of assets, especially credit assets, will increase. ease.However, from the perspective of historical laws, the end of the "asset shortage" is mainly due to the tightening of liquidity, the pivot of market interest rates has turned upward, and the demand for capital allocation has declined.Therefore, in the short term, the current "asset shortage" may continue for some time.
"On May 25, the State Council held a national teleconference on stabilizing the economic market, which released a stronger signal of stabilizing growth. It is expected that the follow-up easing policy will continue to increase, and from policy introduction to credit repair to substantial economic improvement, it is necessary to For a certain period of time, with loose funds and strong bond market allocation, the situation of 'asset shortage' will continue." Yu Lifeng said that with the easing of the current round of the epidemic, the effect of the policy of stabilizing growth has become apparent, and the economy is basically facing upward recovery. It is relatively clear that the capital interest rate and bond market yield will be adjusted, and the "asset shortage" faced by the bond market will end.
【Editor: Shao Wanyun】
