It is expected to go on sale next week! The 30-year ultra-long-term special treasury bond was first issued today, with an annual interest rate of 2.57%, and the personal purchase strategy was thoroughly explained at one time

National Business Daily

2024-05-17 21:18Published on the official account of Sichuan Daily Economic News

Reporter: Li Yuwen, Shi Yuxin, Song Qinzhang, Editor: Liao Dan

The 30-year ultra-long-term special treasury bonds were officially launched today, and the winning results showed that the weighted winning interest rate of "24 special treasury bonds 01" was 2.57%, with a full-market multiple of 3.9 and a marginal multiple of 382.6.

According to the issuance arrangement, the first 30-year ultra-long-term special treasury bonds are fixed-rate interest-bearing bonds, with a total amount of 40 billion yuan, and individual investors can also subscribe! The reporter learned that some banks will start selling ultra-long-term special treasury bonds next week.

With the decline in bank deposit interest rates and the gradual "hard to find" long-term large-amount certificates of deposit, treasury bond products with guaranteed principal and interest and higher returns than fixed deposits of the same maturity have become "sweet and sweet" in the eyes of individual investors.

What are the advantages of ultra-long-term special treasury bonds over principal-guaranteed products such as bank deposits and savings treasury bonds? What should individuals pay attention to when investing in ultra-long-term special treasury bonds...... This article will take you through these key questions.

Individuals can buy it too!

Ultra-long-term special government bonds were issued today

The 2024 government work report proposes that in order to systematically solve the funding problem of some major projects in the process of building a strong country and national rejuvenation, it is planned to issue ultra-long-term special treasury bonds for several consecutive years starting from this year, which will be used for the implementation of major national strategies and security capacity building in key areas, and 1 trillion yuan will be issued this year.

What are ultra-long-term special government bonds? Ultra-long-term special treasury bonds refer to treasury bonds with an issuance period of not less than 10 years, issued in stages during a specific period of time, and with specific purposes, which are not included in the deficit or increase the deficit rate.

Recently, the ultra-long-term special treasury bonds, which have attracted much attention, have finally landed. On May 13, the Ministry of Finance issued the Notice on Announcing the Relevant Arrangements for the Issuance of General Treasury Bonds and Ultra-Long-term Special Treasury Bonds in 2024. According to the arrangement, the maturity of ultra-long-term special treasury bonds includes 20 years, 30 years and 50 years, and interest is paid on a semi-annual basis. From the initial offering on May 17 to the completion of the issuance in mid-November, a total of 22 issuances were issued, and the issuance time was mainly concentrated in the third quarter.

Among them, the 2024 ultra-long-term special treasury bond (phase I) is a 30-year fixed-rate interest-bearing bond, which was tendered and issued on May 17, with a total face value of 40 billion yuan in competitive bidding, and the interest will be calculated from May 20, 2024, and the interest will be paid semi-annually, and the interest payment date will be May 20 (postponed accordingly on holidays) and November 20 each year, and the principal will be repaid and the last interest will be paid on May 20, 2054. The tender closes until May 20, 2024 for distribution, and the listing will start trading on May 22.

Ultra-long-term special treasury bonds are guaranteed by national credit, which has the advantages of low risk, strong liquidity, exemption from interest income tax, etc., and has higher returns than short- and medium-term treasury bonds, making them ideal investment products. So, how can individual investors buy the ultra-long-term special treasury bonds issued this time?

It is understood that ultra-long-term special treasury bonds can be purchased by individuals and institutions, and there are many channels, such as bank counters, online platforms, and securities markets, and they can also be circulated and transferred.

On May 17, the website of the Ministry of Finance released a Q&A on the purchase of treasury bonds by individual investors, which mentioned that the ultra-long-term special treasury bonds issued this year are book-entry treasury bonds, with three maturities of 20 years, 30 years and 50 years, and the specific purchase operation shall be handled according to the book-entry treasury bond purchase process. Book-entry treasury bonds are mainly issued to institutional investors in the primary market through book-entry treasury bond underwriting syndicates, and the claims are recorded in the form of electronic bookkeeping in the Central Clearing Company. After listing, individual investors can also buy from institutional investors in the secondary market.

Wu Suwei, a private wealth manager, said in an interview with the Daily Economic News reporter (hereinafter referred to as "every reporter") that the current long-term income is stable and safe assets are relatively scarce, and the interest rate and safety of long-term treasury bonds will be favored by many investors. However, he also mentioned that individuals who buy long-term treasury bonds need to make a comprehensive assessment of their investment amount, term, interest rate, etc., and at the same time fully understand the terms of treasury bonds, early redemption, transfer, etc.

The Ministry of Finance reminds that for individual investors, the purchase of savings treasury bonds and book-entry treasury bonds can obtain stable principal and interest income if they are held to maturity. The main difference between the two is that savings treasury bonds cannot be listed and traded during the duration period, while book-entry treasury bonds can be traded in the market during the duration period. The trading price of book-entry treasury bonds fluctuates with market conditions, and investors may gain trading income due to rising prices after buying, or they may face the risk of losses due to falling prices. Therefore, individual investors in book-entry treasury bonds who do not hold them to maturity but make profits from trading should have certain investment experience and risk-taking ability.

Is there an advantage to "fighting" principal-protected products?

Some banks are expected to start sales next week

So, how do you buy ultra-long-term special government bonds? In an interview with reporters, the staff of the fixed income department of CITIC Securities said that this round of ultra-long-term special treasury bonds is issued in a market-oriented manner, and individuals can choose bank counters for subscription.

As for the purchase channels of book-entry treasury bonds, the Ministry of Finance also said that the counter business establishment institutions of the national inter-bank bond market independently select certain bond varieties for investors to purchase according to market demand, and individual investors can purchase them through their branch counters, online banking or mobile banking. Book-entry treasury bonds listed and traded on the stock exchange can be purchased by individual investors through the outlets of securities companies or the APP of securities companies.

Individual investors can purchase book-entry treasury bonds through the counter business of the national interbank bond market

On May 16, after the reporter visited a number of bank outlets in Shanghai, a staff member of a branch of China Merchants Bank told the reporter that it is expected to start selling ultra-long-term special treasury bonds with a maturity of 30 years next week. A city commercial bank told reporters that the bank will sell ultra-long-term special treasury bonds over the bank counter on May 20, that is, next Monday.

In addition, the staff of a number of bank outlets told this reporter that they have not yet received a specific notice on the sale of ultra-long-term special treasury bonds.

In fact, in the context of the financial management breaking the rigid exchange and the continuous decline of market interest rates, treasury bonds are favored by the people by virtue of the advantages of safe and stable income.

So, including treasury bonds, what are the "principal-protected" products in the current market that can be chosen by the majority of low-risk individual investors? What are the advantages and characteristics of different products? Every time the reporter combined with the front-line visit, the situation of various products is sorted out as follows.

●Time deposits: Small and medium-sized banks have higher interest rates, and large-value certificates of deposit highlight the advantages of being transferable

During the reporter's visit, it was learned that the current three-year time deposit interest rate of ICBC, CCB, Agricultural Bank of China and other major banks is 2.35% (annualized interest rate, the same below).

The blackboard placed in the lobby of an ICBC outlet reads that RMB fixed deposits are 1.7% for 1 year, 1.9% for 2 years, and 2.35% for 3 years.

The financial manager of a branch of CCB told reporters that time deposits were 1.7% for 1 year, 1.8% for 2 years, and 2.35% for 3 years.

Compared with large banks, the fixed deposit interest rate of joint-stock banks is slightly higher. According to the board at the entrance of a branch of Industrial Bank, Fuyunjin RMB fixed deposit has a minimum deposit of 50 yuan, 1.65% for 3 months, 1.85% for 6 months, 1.95% for 1 year, 2.15% for 2 years, and 2.60% for 3 years.

The interest rate of "Enjoy Time Deposit" of China Merchants Bank varies according to different minimum deposit amounts, with a minimum deposit of 100 yuan, 1.5% for 3 months, 1.7% for 6 months, and 1.95% for 1 year; When depositing at least 1000 yuan, it is 1.65% for 3 months, 1.85% for 6 months, 1.95% for 1 year, and 2.15% for 2 years.

When the reporter inquired about the 3-year time deposit, the financial manager said that if you need to transfer new funds from outside the bank, and the account amount reaches 500,000 yuan or more, you can make an appointment for a 3-year time deposit through the financial manager, with an interest rate of 2.6%. "There is no quota now, and there should be by the end of the month." The financial manager said.

In addition, compared with large banks and joint-stock banks, the deposit interest rates of some small and medium-sized banks are more attractive. The reporter saw that the propaganda page of Zhejiang Chouzhou Commercial Bank showed that personal fixed deposits were 1.60% for 3 months, 1.85% for 6 months, 2.10% for 1 year, 3.05% for 3 years and 5 years, all of which were 50 yuan minor.

On this basis, the interest rate can be further raised, the financial manager told reporters that the 3-year interest rate of 200,000 deposits can rise to 3.2%, but at the same time, it is necessary to buy a 20% one-year time deposit, that is, a total of 200,000 yuan for three years (interest rate 3.2%) and 40,000 yuan for one year (interest rate 2.1%).

It is worth mentioning that under the pressure of banks facing narrowing interest rate spreads and reducing high-cost liabilities, the interest rate of large-denomination certificates of deposit, which was once regarded as a tool for banks to attract savings, is now much different from ordinary time deposits, or even the same level, and its transferable function is a major advantage over ordinary time deposits.

The president of a branch of the Agricultural Bank of China told reporters that the three-year large-amount certificate of deposit is the same as the ordinary fixed interest rate of 2.35%, but there is a difference between the two, if the fixed deposit is withdrawn in advance, the interest is calculated at 0.2% of the current deposit, and the large-amount certificate of deposit can be transferred to others through the mobile phone or over the counter.

The reporter learned that at present, large-value certificates of deposit are still quite popular, and some banks have "seconds" as soon as the quota of large-amount certificates of deposit is released. The financial manager of a branch of the above-mentioned Industrial Bank told reporters that the interest rate of the bank's one-year large-amount certificates of deposit is 2%, which is only 0.05 percentage points higher than that of ordinary fixed deposits, but the quota is basically released at 10 a.m. every day.

●Savings treasury bonds: Advance redemption can be divided into tranches of interest, which is different from book-entry treasury bonds

Savings treasury bonds refer to a kind of non-negotiable treasury bonds issued by the government of a country to individual investors for the purpose of absorbing personal savings funds to meet the needs of long-term savings investment.

In fact, since last year, savings bonds have experienced several "interest rate cuts". Entering 2024, the interest rate on savings bonds will continue its downward trend. The interest rate on the 3-year and 5-year savings bonds issued in April (electronic) fell to 2.38% and 2.5%, respectively. The reporter noted that the interest rate on the most recent savings treasury bonds (certificated) issued in May remained the same as in April.

Although the interest rate on savings bonds continues to fall, it is still difficult to resist investors' enthusiasm for subscription, and every time savings bonds are issued, most bank outlets will stage a "daylight" rush to buy. At a branch of the Industrial and Commercial Bank of China, the reporter saw that on the first day (May 10) of the latest issue of savings treasury bonds, the bank posted an announcement on the door that the savings bonds were sold out.

It is worth mentioning that savings bonds are not negotiable and transferable, but in order to meet the liquidity needs of investors, savings bonds provide an early redemption mechanism: interest will be calculated and paid according to the actual holding time and the corresponding tranche interest rate.

●Bancassurance products: suitable for long-term investment, short-term surrender or loss of principal

With the continuous decline of deposit interest rates, savings insurance represented by increased whole life insurance and dividend insurance has been favored by many investors, and it is also a consignment product that banks have focused on in recent years.

During the reporter's consultation, a number of financial managers admitted frankly that only in terms of income comparison, some savings insurance will be more cost-effective than 5-year treasury bonds. The financial manager of a branch of CCB gave the reporter an example of a 6-year dividend insurance, with an annual premium payment for the first 3 years, and a guaranteed return of 1.4%, plus dividends from insurance companies, the average annualized return after 6 years of expiration is in the range of 2.9% to 3.2%.

It is worth mentioning that bancassurance products are generally suitable for long-term investment, and the surrender of the policy may result in a loss of principal due to low cash value in the short term. "Look at the capital plan, this money should be able to be put in five years or more, if it will be used in two or three years, then we will not recommend that you buy insurance." The president of a branch of the Agricultural Bank of China said.

Where to throw?

It is specially used for the implementation of major national strategies and security capacity building in key areas

According to the 2024 government work report, the ultra-long-term special treasury bonds mentioned this time are aimed at promoting a sustained economic recovery.

Zheng Shajie, director of the National Development and Reform Commission, said at a press conference on the economic theme of the second session of the 14th National People's Congress on March 6 that starting from this year, ultra-long-term special treasury bonds will be issued in the next few years to be used for the implementation of major national strategies and security capacity building in key areas.

The reporter noted that the issuance of ultra-long-term special treasury bonds in 2024 is not the first time.

As early as 1998, the mainland issued 270 billion yuan of special treasury bonds to the four major state-owned banks, mainly to supplement the capital of wholly state-owned commercial banks.

In 2007, another 1.55 trillion yuan of special treasury bonds were issued to set up the capital of CIC.

The most recent was in 2020, when 1,000 billion yuan of special anti-epidemic treasury bonds were issued.

Regarding the investment direction of this year's ultra-long-term special treasury bonds, Liu Sushe, deputy director of the National Development and Reform Commission, introduced at a press conference in mid-April that in terms of support areas, ultra-long-term special treasury bonds focus on accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting urban-rural integration development, promoting regional coordinated development, improving the security capacity of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.

It is understood that in conjunction with the issuance of ultra-long-term special treasury bonds, the National Development and Reform Commission and relevant departments have studied and drafted an action plan to support the country's major strategies and security capacity building in key areas, and will begin to organize its implementation after approval and approval.

Li Xuhong, vice president of the Beijing National Accounting Institute, said in an interview with reporters that the mainland is currently in a period of high-quality development, so it needs to focus on supporting matters related to the implementation of major strategies, and ultra-long-term special treasury bonds can ensure high-quality development and high-level security and benign interaction, and consolidate the foundation for national security and long-term development.

How does it affect the capital markets?

Supporting the recovery of the stock market and having a small impact on the bond market

Ultra-long-term special treasury bonds can not only stimulate current investment and consumption, but also lay the foundation for long-term high-quality development. So, what will be the impact of its issuance on the stock market?

Yang Delong, chief economist of Qianhai Open Source Fund, said in an interview with every reporter: "The issuance of ultra-long-term special treasury bonds can support economic recovery, boost investment growth, and support the recovery of the stock market from fundamentals. ”

Pan Xiangdong, chief economist of the Qirhenium Research Institute, said: "Compared with ordinary treasury bonds, ultra-long-term special treasury bonds are specially used for the implementation of major national strategies and security capacity building in key areas, and have the characteristics of special funds, which will help expand demand, stimulate economic growth and boost market confidence, so the overall impact on the stock market is positive." ”

China AMC believes that, on the whole, on the one hand, the issuance of special treasury bonds will help accelerate government investment, and at the same time stimulate private supporting investment and stimulate domestic demand; On the other hand, the acceleration of the fiscal pace will help boost the expectation of macro bottoming and stabilization, and enhance the market's risk appetite for China's equity assets, which is generally positive for the stock market.

What will be the impact of the issuance of ultra-long-term special treasury bonds on the bond market?

According to Yang Delong's analysis, since the current round of ultra-long-term special treasury bonds is issued in multiple batches, the impact on the market's funds is not large, and it will not cause obvious financial tension to the bond market, and the issuance of ultra-long-term special treasury bonds will also help optimize the mainland's debt structure.

Pan Xiangdong said that throughout the year, the overall supply rhythm of government bonds is more backward, and it may usher in greater concentrated supply pressure in the third quarter. However, even if the accelerated issuance of government bonds disrupts the market, the PBOC will cooperate by reducing the reserve requirement ratio (RRR) and increasing the volume of MLF to deal with potential liquidity pressures and guide the market to return to stability.

Wu Zhiwu, senior director of the R&D department of China Securities Pengyuan, said in an interview with reporters that from a historical point of view, the issuance of special treasury bonds will increase the supply of the bond market in the short term, which may lead to fluctuations in the bond market, but the central bank can improve the impact through certain measures. Since the purpose of this issuance of ultra-long-term special government bonds is to expand domestic demand, it is also important to prevent the resulting fluctuations in the market. Judging from the issuance of ultra-long-term special treasury bonds, the issuance time span is relatively long, and the scale of the issuance is about 100 billion or 200 billion yuan per month, which is not very large, and the impact on the market should be relatively small.

The issuance of special government bonds in 2007 had a limited impact on the bond market

What's the point?

Improve the efficiency of capital use and optimize the structure of government debt

What is the significance of the mainland's issuance of ultra-long-term special treasury bonds at this stage? Xu Junwei, a lecturer at the School of Finance and Taxation of the Capital University of Economics and Business, said in an interview with reporters that at present, the mainland economy has turned from high-speed growth to high-quality development, and is in a transition period of economic transformation from old and new economic momentum.

Feng Lin, director of the research and development department of Oriental Jincheng, believes that the market-oriented issuance of special treasury bonds reflects the determination to promote the market-oriented pricing of bond issuance, and on the other hand, it is also conducive to mobilizing all kinds of social funds to participate in the construction of major projects in key areas. From the perspective of the issuance period, the issuance of ultra-long-term special treasury bonds can better match the financing needs of long-term projects, improve the efficiency of capital use, and enhance the financial guarantee capacity of long-term projects.

Lian Ping, president and chief economist of Guangkai Chief Industry Research Institute, said that from the perspective of this year's issuance arrangement, the 20~50-year special treasury bonds cover key time nodes such as 2030, 2035 and 2049, which can not only provide abundant ultra-long-term funds for major projects and major projects with long construction cycles and slow return on investment, but also dilute the pressure on interest payment of treasury bonds in the ultra-long-term period.

Li Xuhong said that ultra-long-term special treasury bonds can not only optimize the debt structure, reduce debt risks, give full play to the advantages of lower costs and longer cycles of central government bond issuance, form high-quality assets, and at the same time avoid hidden risks caused by local leverage through overall management, so as to ensure the steady and long-term development of the country.

Xu Junwei said that while the State Council is deploying a package of debt solutions to prevent and resolve local debt risks, the central government plans to issue ultra-long-term special treasury bonds in the next few years, which can not only ensure the implementation of major national strategies and security capacity building in key areas, but also optimize the debt structure of central and local governments.

According to the data, as of April 30, 2024, the ultra-long-term treasury bonds in the mainland's stock of treasury bonds are dominated by 30-year and 50-year bonds, accounting for 11.6% and 3.6% respectively. In the future, if ultra-long-term special treasury bonds are issued for several consecutive years, the situation of a relatively low proportion of ultra-long-term treasury bonds will be effectively improved.

National Business Daily

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