With the convening of the Politburo meeting, "seeking progress in stability, promoting stability with progress, and establishing first and then breaking" has become the general tone of economic work in 2024What are the key points to pay attention to in the bond market?And how to deal with it?Let's take a look at what the market is saying.
In 2024, what does Chengtou think
2023 is a year in which the urban investment policy exceeds expectations, and the "package of bond policies" dominates the trend of the urban investment bond market in the second half of the year. In 2024, the "asset shortage" is likely to continue, especially for high-coupon assets. For credit spreads, this round of compression has been significantly faster, and credit spreads priced for credit risk are already very limited. In a state where the credit environment tends to converge, the probability of a credit event impact does not seem to be high, and the fluctuation of credit spreads in 2024 is likely to come from the overshoot of credit bonds caused by interest rate adjustments. How to effectively resolve local debt pressure?On the one hand, it is necessary to boost the land market and increase the income from local land transfer (i.e., the ** budget revenue), at present, the real estate policy is still continuing to loosen, but the actual effect is limited, and it is necessary to be cautious in the corresponding estimates. On the other hand, it is to effectively reduce the pressure on interest payments. At present, the financing cost of urban investment bonds has dropped significantly, but the net interest margin of banks has been at a low level. In this year's "package of debt policies", the specific effect in this regard remains to be seen. 
*: Fixed income method.
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2024, several keywords in the bond market
Looking back on the past period, China's 10-year treasury bond interest rate is more in line with the fluctuations of the domestic economy in the short cycle. In the past period when real estate was the main driving force of the economy, the changes in the real estate cycle were the main driving force for the changes in the bond market cycle. Therefore, in the post-property era, the focus on economic fundamentals may be more diversified in bond analysis. Under the goal of high-quality development, the continuous transformation of old and new kinetic energy is the meaning of the topic, and the key lies in the coordination of monetary and fiscal affairs. Post-Real Estate Era: Re-examine, Re-start. In summary, in the post-real estate era, the framework and logic of bond analysis may also be adjusted accordingly, and the focus on economic fundamentals may be more diversified. Under the goal of high-quality development, the continuous transformation of old and new kinetic energy is the meaning of the topic, and the key lies in the coordination of monetary and fiscal affairs. In summary, in 2024, the new rules on debt and capital are important factors affecting investor behavior, and there may be a certain differentiation between the behavior of banks and non-banks. However, from the current macro picture, on the whole, the bond market will still face a situation of insufficient supply of high-coupon assets, stable and balanced capital, and limited risk appetite repair in 2024, which determines that the "asset shortage" pattern is expected to continue, especially for non-banks. 
*: Tan talks about the bond market.
To read the full article, please click here2024, several keywords in the bond market
2024, Urban Investment Bond Investment StrategyEmbrace short-duration, high-coupon assets. Short-term yields are tight at the moment, but there are still short-duration, low-rated bonds for investors to tap into coupon yields. Medium and high yield accounts can focus on the excess returns of low-rated bonds with a remaining maturity of less than 1 year in Kunming, Liuzhou, Guiyang, Mianyang, Xining and Yinchuan. It is still feasible for strong provinces, districts and counties to increase leverage on investment bonds to earn interest rate differentials. For areas where interest rate spreads are compressed to a low level and the follow-up downward momentum is insufficient, the strategy of increasing leverage and carrying interest to increase income can still be adopted. At present, some cities in Jiangsu, Zhejiang and central provinces have a trend of "quasi-interest rate", but they can still provide a return of more than 3%. Grasp the spreads of perpetual, private placement, and guaranteed bonds. Investors can also pay attention to high-coupon investment opportunities in private placement and perpetual products. Shandong, Sichuan and Shaanxi have private placement bond valuations of more than 4% within one year, and high-yield accounts focus on private placement bond investment opportunities within one year in key provinces such as Guizhou, Yunnan and Guangxi.
*: Fixed income Jiangtan.
To read the full article, please click hereWhy not roar and Xu Xing - the annual strategy of urban investment bonds in 2024