Key takeaways:
In 2024, the domestic economy will continue to recover with policy support。The momentum of production has gradually increased, and structural adjustment will continue. The adjustment of the production structure and the allocation of factor resources in the capital, population, state-owned enterprises and the private economy are important factors to enhance the momentum of economic growth in the medium and long term. Consumption potential needs to be further stimulated;Manufacturing and infrastructure investment should start from the two directions of making up for shortcomings and promoting upgrading, focusing on infrastructure construction investment and social and people's livelihood improvement investment, promoting upgrading, focusing on industrial structure adjustment and optimization, focusing on overcoming high-tech manufacturing, science and technology and other key links: real estate investment will continue to digest inventory and debt risks: foreign trade is expected to rebound in the context of maintaining resilience.
In 2024The inflation center is gradually rising。With the acceleration of the implementation of various policies and the continuous improvement of domestic demand, the CPI will further accumulate momentum. The profits of industrial enterprises are gradually rebounding, and the issuance of trillions of treasury bonds will drive the growth of infrastructure investment, and the demand for upstream raw materials and industrial products will improve under the situation of the construction of the "three major projects".
Key takeaways:
The profits of industrial enterprises were steadily restored, and the year-on-year growth rate improved significantly due to the base problem. From the perspective of driving factors, the decline in volume and price, and the decline in costs and profit margins caused by the decline in raw materials are the main reasons for supporting the improvement of profits. In terms of industries, steel and nonferrous metals in the upstream industries benefited from price increases and profit margins rebounded, respectively, and profit margins improved. In the middle and downstream industries, electronic equipment, textiles and clothing, pharmaceuticals and automobiles, demand has improved significantly, the contribution of volume has increased, and profits have continued to recover.
We believe that in the next stage, whether the demand of industrial enterprises can be further improved, bring about the continuous repair of profits, and start the replenishment cycleGreater countercyclical adjustment policy support is needed.
Key takeaways:
When the PPI turns from negative to positive, it is when the profits of industrial enterprises tend to improve and the inventory cycle of industrial products starts to rise. At present, the rebound of the ** index has become a policy goal. The CPI has remained around 0% since April, falling to -0 in October and November, respectively2%、-0.5%；PPI arrived in June -5At the bottom of 4%, the decline narrowed to -2 in September5%, but it fell to -2 again in October and November6%、-3.0%, and the PPI has been negative for 14 months so far.
From the perspective of domestic policies and the global environment, our PPI will tend to rise throughout the year in 2024, and it will be able to turn from negative to positive after the second quarter, and the CPI will run stably at 1 throughout the year0% or so. The main logic is that after the US dollar index falls, global aggregate demand will bottom out, driving China's exports, and at the same time, the effect of domestic policies will be further released, and the situation of China's economy's "insufficient effective demand and overcapacity in some industries" will be alleviated.
Key takeaways:
In September, after the change of funds, the yield of urban investment mostly increased, but the weakly qualified urban investment in this round of ** instead came out of the "independent**" behind the decline of urban investment risk, and the sinking strategy became dominant. The tightening of short-term liquidity is a direct trigger for the extreme reversal of urban investment. The duration of the urban investment bond market is short, so the mainstream 1-2 year yield curve change of urban investment is more in line with the trend of 1-year treasury bonds. After the change in the capital market in September, most of the urban investment interest rates rose, but the urban investment in the weakly qualified areas did not fall but rose out of independence**. This is mainly due to the fact that the package of debt repayment has reduced the risk of urban investment and brought about the sinking of urban investment**.
The risk-free rate is expected to fall further, and the second permanent strategy is also dominant. Tier 2 capital bonds should be operated for a longer period of time, and the current position of tier 2 bonds is not suitable for further sinking from the perspective of price comparison, after all, the margin of safety of urban investment bonds of similar rated varieties is higher, and although the liquidity of secondary bonds is better, it is limited to high-grade entities. Judging from the transaction data, institutions may be carrying out long-term operations on the main body of implied rating AA+ and AA Tier 2 capital bonds, and it is recommended to pay attention to long-term secondary perpetual bonds in the context of the downward trend of risk-free interest rates.
Risk warning: localized debt is less than expected;2. The perpetual debt is not redeemed;Risk-free rate** risk.
Key takeaways:
Looking forward to 2024, there are several decisive clues that will have a greater impact on the bond market: First, overseas, with the Fed's monetary policy pivot in 2024, the constraints of external factors on the domestic monetary policy are expected to be significantly eased, and the external pressure on the domestic bond market will be marginally relaxed.
Second, as the second year of China's economic normalization, we will focus on the annual growth target and the corresponding fiscal policy strength. In a neutral scenario, the 5% growth target could correspond to a 3% budget deficit ratio and a new special debt limit of nearly 4 trillion yuan. Against this backdrop, the supply pressure of ** bonds in the first quarter of 2024 may not be significantly higher than that of the same period in 2023. Compared with August-December 2023, the overall supply pressure of ** bonds in the first quarter of 2024 may decline quarter-on-quarter, and the bond market may enter a period of easing of supply pressure.
Key takeaways:
Based on the review and reflection of the bond market in the fourth quarter, we have the following summary:
1) The generation of investment opportunities comes from the fundamentals of the beyond expectations and the transaction margin, with the urban investment model and real estate on the economic driving momentum gradually faded, the volatility of economic fundamentals will become smaller and smaller, in the follow-up investment research, more attention should be paid to the study of the debt side;
2) It is not advisable to extrapolate conclusions linearly based on historical experience, and when incremental information appears, we should not stick to the conclusions of the previous period, start from the framework rather than the conclusion, insist on rethinking the framework, and maintain the independence of thinking.