Our reporters Hao Yajuan and Zhang Rongwang report from Shanghai and Beijing
In 2024, the first round of online and offline sales of savings bonds will be hot, attracting attention.
Li Xianzhong, director of the Treasury Department of the Ministry of Finance, said that the electronic savings treasury bonds issued in April sold 99.7 percent of the planned issuance amount on the first day of issuance, and the progress was significantly faster than the average in recent years.
"Compared with other savings products, in addition to the safety of the principal, the low investment threshold, and the slightly higher yield, the interest loss of the early realization of savings bonds is small, and the income is predictable. Investors can also obtain short-term bank loans through savings pledges to meet short-term liquidity needs. "China Everbright Bank (601818. SH) financial market department macro researcher Zhou Maohua pointed out in an interview with a reporter from China Business News.
Interviewees reminded that savings treasury bonds, as financial products, face certain market volatility risks and inflation risks, and investors need to diversify their allocation according to their own risk and return preferences to achieve the goal of wealth security and long-term growth.
Safe, liquid, and highly profitable
Savings treasury bonds are non-negotiable RMB treasury bonds sold by the Ministry of Finance to individuals through members of the savings treasury bond underwriting syndicate, which are divided into two types: savings treasury bonds (certificate type) and savings treasury bonds (electronic type).
According to the information on the official website of the Ministry of Finance, from April 10 to 19, the first and second phases of the 2024 savings treasury bonds (electronic) will be officially issued, both of which are fixed-rate and fixed-term varieties, with a total issuance amount of 45 billion yuan. The first tranche of savings bonds has a maturity of three years with an annual coupon rate of 2.38 percent and a maximum issuance amount of 22.5 billion yuan, while the second tranche of savings bonds has a maturity of five years with an annual coupon rate of 2.5 percent and a maximum issuance amount of 22.5 billion yuan.
It is worth mentioning that in the first round of savings treasury bond issuance in 2024, there will be a phenomenon of "difficult to buy" and "cannot be grabbed", and it will be pushed to the hot search. A relationship manager at a state-owned bank branch said: "Many customers waited in advance before the branch opened, and the savings bonds were sold quickly. The reporter noticed that many investors complained that they couldn't grab savings bonds from mobile phone channels.
Talking about the phenomenon of "hot" issuance of savings bonds, Li Xianzhong said that since April, due to factors such as some banks lowering deposit interest rates and suspending the sale of long-term large-amount certificates of deposit, the attention of savings bonds has further increased. The electronic savings bonds issued in April sold 99.7% of the planned issuance amount on the first day of issuance, which is significantly faster than the average in recent years. There is an instantaneous contradiction between supply and demand on the online (mobile) side of some banks, with an average of about half an hour for the online (mobile) sales time of 32 banks, and the sales time of two banks lasts less than 1 minute, which is basically a second light, and another 7 banks are sold out within 6 minutes.
Industry insiders also mentioned that the current decline in bank deposit interest rates and the "shortage of large-amount certificates of deposit" have made savings bonds one of the important choices for investors to protect their capital. Zhou Maohua told reporters that in recent years, the interest rate of savings deposits, especially time deposits, has declined significantly, and savings treasury bonds represent national credit and can better balance income and liquidity needs, so that some investors will choose savings treasury bonds to replace some deposits.
An Guangyong, an expert of the Credit Management Committee of the All-Union M&A Trade Union, pointed out that the security of savings bonds is relatively low, and the risk of savings bonds is relatively low compared with high-risk investment methods such as stocks and funds, and the principal and interest can be paid on time at maturity. At present, the equity market is volatile, the investment field is limited, and the real estate market is still adjusting, and investors tend to choose this asset with lower risk and stable returns.
Aiming at "hard to find a debt" Li Xianzhong said that in the next step, we will pay close attention to the changes in the supply-demand relationship and the sales situation of savings bonds, and study an appropriate increase in the scale of issuance; study further lowering the limit for purchasing bonds by a single person so that savings bonds can benefit more investors; on the basis of guaranteeing sales over the counter, we will continue to improve the level of information services for electronic savings bonds, steadily increase the sales volume of electronic savings bonds on the Internet (mobile phone) side, and guide more investors to purchase bonds through the online (mobile phone) side; and work with relevant departments to optimize the quota allocation mechanism for certificate savings bonds and better match the outlets with actual demandand study the medium- and long-term arrangements for optimizing the issuance ratio of certificate and electronic savings treasury bonds, so as to better meet the needs of investors for bond purchases.
Overall, the scale of government bonds directly held by mainland residents is relatively small, and relevant policies have been introduced to facilitate residents' participation in the bond market. The People's Bank of China issued the Notice on Matters Related to the Counter Business of the Interbank Bond Market, which proposes to further expand the types of over-the-counter bond investment and optimize the relevant institutional arrangements to facilitate the bond investment of residents and other institutional investors, which will be implemented from May 1, 2024.
Professor Luo Ronghua, executive vice president of the China Institute of Financial Research of Southwestern University of Finance and Economics, pointed out that the above-mentioned notice provides a relatively easy entry point for residents in the bond market in addition to bond funds and bank wealth management. In terms of varieties, the over-the-counter market provides more and more types of bonds, including but not limited to treasury bonds, financial bonds and other types of bonds that have been traded and circulated in the interbank bond market, and their yields are usually higher than savings deposits of the same maturity. Product diversification enables individual investors to choose the right bond varieties to invest in according to their risk appetite, investment horizon and return requirements. More diversified investment options also help investors to allocate assets and diversify their risks.
Asset diversification reduces investment risk
The reporter noted that from 2023 to the present, the interest rate on 3-year savings bonds (electronic) has dropped by 62BP from 3% to 2.38% in the latest period, and the interest rate on 5-year savings bonds (electronic) has dropped by 62BP from 3.12% to 2.5% in the latest period. According to Zhou Maohua's analysis, the reason for the reduction of the interest rate on savings bonds is, on the one hand, driven by the downward shift of the market interest rate center in recent years, and on the other hand, it is affected by the supply and demand situation of the savings and treasury bond market.
So, what is the future trend of the interest rate on savings bonds? What should residents pay attention to when investing in savings bonds?
Looking forward to the trend of interest rates on savings bonds, Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, pointed out that it is expected to remain stable, the government will be more standardized in the issuance and management of savings bonds, and the possibility of interest rate cuts is small. At the same time, with the gradual recovery of the economy, market interest rates will also gradually rise, and the interest rate on savings bonds is also expected to rise.
"The trend of savings government bond interest rates will depend on macroeconomic conditions and the central bank's policy guidance. If the economy recovers, it may witness a gradual rise in interest rates to hedge against inflation risk. Conversely, if the economy continues to decline or faces greater downward pressure, the central bank may maintain a low interest rate policy or even cut interest rates further to support the economy. ”
For investors, Bai Wenxi pointed out that the advantages of savings bonds are lower risk, stable returns, and good liquidity, while their disadvantages are relatively low yields, which may not be the best choice for investors pursuing high yields. Therefore, for investors, savings bonds can be used as part of a sound investment when allocating assets, but do not rely too much on them. At the same time, we can consider pairing savings bonds with other high-yield, high-risk investment methods to achieve asset diversification and reduce investment risks.
According to the White Paper on Household Wealth Allocation in China (Q1 2024) (hereinafter referred to as the "White Paper") released by Industrial Economic Research and Consulting Co., Ltd., the year-on-year growth rate of residents' deposits has further slowed down, the momentum of residents' wealth management allocation has recovered significantly, and the proportion of fixed-income wealth management has continued to increase. In terms of funds, the issuance of bond funds is still hot, and the issuance of equity funds is cold, but the trading volume of the stock market has rebounded slightly, and risk appetite has improved.
In terms of investment and financial behavior, the "2023 Survey Report on Investment and Financial Behavior of Chinese Residents" released by the China Institute of Financial Research of Shanghai Jiao Tong University, Ant Group Research Institute and Ant Financial Think Tank shows that the level of expected returns of residents is gradually decreasing, and the gap between expected returns and actual returns is narrowing. The allocation preference of wealth management products has become more concentrated and conservative, the proportion of public fund allocation has decreased, equity assets have decreased, and fixed income assets have increased, showing obvious hedging characteristics. The allocation ratio of insurance products has increased, and the allocation ratio of annuity insurance has increased compared with traditional life insurance and property insurance.
In fact, the so-called prudent financial management is not about looking for a certain product, but about establishing a reasonable financial management portfolio, maintaining a balanced asset allocation, and achieving wealth management goals. Huang Dazhi, a researcher at Xingtu Financial Research Institute, said in an interview with reporters that investors should adjust their financial goals according to the market environment and choose an asset portfolio that is consistent with their risk appetite. In general, an asset allocation framework can be established according to the S&P allocation system, that is, the allocation combination is based on the ratio of "10% cash and other liquid assets, 20% insurance protection, 30% equity appreciation, and 40% capital guaranteed fixed income".
In terms of asset allocation, the white paper suggests that, firstly, in the context of the netting of wealth management products and the intensification of equity market volatility, it is difficult to avoid the risk of market fluctuations by only allocating a single product or asset, and a balanced and reasonable asset allocation is essential. Second, while establishing the concept of asset allocation, we should reasonably assess our own risk tolerance, rationally manage the expected return on investment, and choose appropriate products. Third, equity fund products can be selected after a comprehensive review of the product's past performance, risk control, and overall style, and historical performance cannot represent future performance, and risks can be diversified through regular investment and other methods. Fourth, the medium and long-term allocation value of gold is still prominent, but the recent rise is large, and we should be wary of the risk of its short-term correction. Fifth, based on the present, focus on the future, and establish the concept of long-term investment.