Author | Li Huiru, Gu Huaiyu, He Fan, Lv Shuang, Chen Hao, Guo Yuwei, Lu Political Commissar
Banks, investment and financing instruments
In terms of the repo market, the open market operation at the beginning of March was mainly to withdraw liquidity, the scale of operation was reduced in the middle of the month, and the cross-quarter liquidity was increased at the end of the month. The operating rate remains unchanged at 1.80% for the 7-day reverse repo rate and 2.50% for the MLF. In March 2024, the mean value of DR001 was 1.74%; The average value of DR007 was 1.89%, and the short-end funding rate pivot was slightly higher than in February. For liquidity in April, it is expected that the overall liquidity will be stable after the cross-quarter, and we will pay attention to the disturbance of liquidity during the tax period.
In terms of the bill market, as of March 29, 2024, the yield on the 6-month rediscount notes of national stocks closed at 1.65%, with a monthly average of 1.94% and a monthly value of 1.95%. In the early stage, commercial banks bought bills maturing in the first quarter, and the maturity scale of bills in the hands of commercial banks in April may be larger, and there is a demand for bill reinvestment and the use of bill impulse. After the implementation of the new capital regulations, commercial banks may prefer bills maturing in the second quarter, the bill curve may have a steepening trend, and the bill interest rate is expected to decline seasonally, based on historical conditions, the downward range of 6M bill interest rates is expected to be between 25bp and 40bp.
In the interbank certificate of deposit market, as of March 29, 2024, the yield on the 1-year AAA interbank certificate of deposit closed at 2.26%, with a monthly average of 2.26% and a monthly value of 2.25%. In March, the achievement rate of interbank certificates of deposit issuance of urban commercial banks dropped to around 82.3%, higher than the historical average of 79.78%, and the achievement rates of interbank certificates of deposit issued by rural commercial banks and joint-stock banks were 91% and 93.4% respectively, both higher than the historical average. Judging from the issuance achievement rate of various types of institutions, the market has a high demand for the allocation of interbank certificates of deposit.
In terms of commercial bonds and capital instruments market, as of March 31, 2024, the yields of 5-year, 3-year and 1-year AAA commercial bonds were 2.49%, 2.40% and 2.23% respectively, up 1.16bp, 2.98bp and 0.00bp from the beginning of the month, and the yields at the beginning of the month were 2.47%, 2.37% and 2.23% respectively, with an average monthly yield of 2.49%, 2.40% and 2.26%; The yields of 3-year and 1-year AAA-Tier 2 capital bonds were 2.62%, 2.52% and 2.35% respectively, up 0.61bp, 3.59bp and 3.14bp respectively from the beginning of the month, and the yields at the beginning of the month were 2.61%, 2.49% and 2.32% respectively, with average monthly yields of 2.63%, 2.56% and 2.38%, and the yields of 5-year, 3-year and 1-year AAA-perpetual bonds were 2.71%, 2.58% and 2.40% respectively , up 5.36bp, 2.26bp and 1.57bp respectively from the end of last month, the yields at the beginning of the month were 2.65%, 2.56% and 2.38%, respectively, and the average monthly yields were 2.71%, 2.62% and 2.43%.
As of March 31, 2024, the available quotas for the approval of second permanent bonds of major state-owned banks, joint-stock banks, urban commercial banks, rural commercial banks and other banks were 540 billion yuan, 433 billion yuan, 128.2 billion yuan, 37.93 billion yuan and 3.5 billion yuan respectively. In March 2024, the total issuance of bank second perpetual bonds was 73 billion yuan, and the total maturity was 145.3 billion yuan. In addition, in April 2024, a total of 7 second-perpetual bonds are facing the possibility of exercising their right of redemption. As of 1 April 2024, the relevant banks have announced the exercise of their right of redemption. In terms of insurance company bonds, in March 2024, the issuance of insurance company bonds was 0.0 billion yuan, and the maturity amount was 36.5 billion yuan. Among them, 1 insurance company's capital supplement bond was redeemed in March and 1 subordinated bond matured.
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