兴业证券股份有限公司 兴业证券研究所
Bond Market Investment Strategy
The recent bond market rebound is mainly because 1) liquidity has yet to tighten, 2) supply of bonds fallsshort of demand, and 3) bonds appear to be more investing-worthy than loans amid stable liquidityenvironment.
In the next half a month, the long-term bonds may continue rebounding. The risk-free rates have overallincreased. We predicted that the bottom of the 10-year government bond rate will stay at around 3.2% andthat of the 10-year CDB bond rate will be now lower than 3.9%, Due to differences in indebtedness andtrading capabilities, market rebound may have different implications on different investors. We don’tencourage those not adept at trading to chase high.
Deleveraging in the financial sector may last longer, and opportunities for making big money from themarket may not arise in the short term. The fragility of the financial system will have long-term effect onthe market. We believe only long-term bonds only deserve short-term investment. Missing one opportunitydoes not mean missing all opportunities. However, if the market falls more sharply than expected, goodinvestment opportunities may arise. Currently, China’s economy runs basically at a steady pace. Changes ofdebts held by financial institutions may be more volatile than economic volatility. We encourage investorsto strengthen debt management. Given the status quo, the opportunity cost for holding bonds to maturityis not high. From March 15, investors need to watch for how changes of economic fundamentals and bondsupply will affect the primary market.
Bond Market Investment Strategy
The recent bond market rebound is mainly because 1) liquidity has yet to tighten, 2) supply of bonds fallsshort of demand, and 3) bonds appear to be more investing-worthy than loans amid stable liquidityenvironment.
In the next half a month, the long-term bonds may continue rebounding. The risk-free rates have overallincreased. We predicted that the bottom of the 10-year government bond rate will stay at around 3.2% andthat of the 10-year CDB bond rate will be now lower than 3.9%, Due to differences in indebtedness andtrading capabilities, market rebound may have different implications on different investors. We don’tencourage those not adept at trading to chase high.
Deleveraging in the financial sector may last longer, and opportunities for making big money from themarket may not arise in the short term. The fragility of the financial system will have long-term effect onthe market. We believe only long-term bonds only deserve short-term investment. Missing one opportunitydoes not mean missing all opportunities. However, if the market falls more sharply than expected, goodinvestment opportunities may arise. Currently, China’s economy runs basically at a steady pace. Changes ofdebts held by financial institutions may be more volatile than economic volatility. We encourage investorsto strengthen debt management. Given the status quo, the opportunity cost for holding bonds to maturityis not high. From March 15, investors need to watch for how changes of economic fundamentals and bondsupply will affect the primary market.
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