In 2023, bond defaults have improved significantly. How do you view credit risk in 2024?How can local platforms revitalize the stock of loans?What is the performance of land transfer income?Let's take a look at what the market is saying.
The likelihood of a direct credit risk event in bonds in 2024 is unlikely
Looking back at 2023, bond defaults have improved significantly. There were 13 new defaulting entities on domestic bonds, and the number and scale of defaulted bonds decreased significantly compared with the same period last year, and the default rate decreasedFrom the perspective of the nature of enterprises, the defaulting entities are still mainly private enterprises. In 2023, all the new defaulting entities are private enterprises. From the perspective of industry distribution, similar to 2022, defaulting entities in 2023 will still be concentrated in the real estate industry. On the whole, the credit events related to urban investment in 2023 are mainly concentrated in regions with greater debt pressure, such as Guizhou, Shandong, Yunnan and other places, which are generally not beyond expectations, and the scale of the existing bonds of the entities involved is small, and there are fewer market participants in the region, and the overall liquidity is relatively stable, so the impact is generally small and limited to individual regions.
With the support of the package of bond policies, the likelihood of a direct credit risk event on bonds in 2024 is not high. However, considering that the fundamentals are still weak and the debt repayment pressure is greater, negative public opinion about non-standard defaults and overdue bills may still occur from time to time.
We will continue to promote localized debt
The 2023 ** Financial Work Conference put forward a clear requirement of "revitalizing the financial resources occupied by inefficiency and improving the efficiency of capital use", aiming to guide the market to weaken its focus on the growth rate of credit scale and focus more on the credit structure. The resolution of local ** debts and the repayment of loans from some local platforms and related parties can also drive the revitalization and release of financial resources.
As the financial sector actively supports the resolution of local debt risks, implements differentiated policies to resolve existing debts, and strictly controls incremental debts, some local financing platform loans will be gradually repaid. Through the issuance of special refinancing bonds to replace the local stock of implicit debts, the bank credit resources precipitated in the implicit debts will be released, and refocused on the areas supported and encouraged by the state, so as to optimize the capital supply structure.
What is the performance of land transfer income?
In November, the income from land transfer stabilized for the first time, and whether it can be continuously repaired still needs to track real estate and the "three major projects". The stabilization of land transfer income may be due to the support of the policy of stabilizing real estate and the optimization of the "land price limit" policy. **Under the guidance of the "risk prevention" of the financial work conference, the optimization of the policy of stabilizing real estate has been increased. At the front end of the real estate chain, the unsold land rate stabilized in November, with an average of nearly 12%, and the premium rate of transacted land was 3%. With the cancellation of the "land price limit" policy at the end of September, as of the end of November, 18 of the 22 price limit cities have relaxed the price limit, and Guangzhou has become the first first-tier city to relax land price. Judging from the results of land auctions in various places, after the cancellation of the "land price limit", the differentiation of land prices has deepened, and the transaction price of some high-quality land plots has broken through the previous premium limit of 15%.