Secondary market review
On January 11, US Federal Reserve Chairman Powell said at the hearing that he would end net asset purchase in March, raise interest rates this year, and tended to hold two to four meetings to discuss the rhythm of table contraction. In addition, Powell expressed optimism about the economy. He believes that the United States can withstand the test of the current surge of cases. This round of infection will only have a “temporary” impact on the labor market, and the economy is ready to start tightening monetary policy. In addition, other Fed officials have also made hawkish remarks.
The market believes that the incremental information of the Fed’s position is limited, the rise of long-term US bonds is limited, the US dollar index is down, and the short-term end continues to rise sharply with the expectation of interest rate increase. Last week, the 30-year US bond yield rose 0.60bp to 2.12%, the 10-year US bond yield rose 2.21bp to 1.78%, and the two-year US bond yield rose 10.47bp to 0.967%. In terms of interest rate spread, the interest rate spread between 10-year US bonds and 2-year US bonds narrowed by 8.26bp to 81.73bp. The interest rate difference between 30-year US bonds and 2-year US bonds narrowed by 9.87bp to 115.51bp, and the US dollar index fell by 0.55 to 95.17.
Credit bonds still showed a downward trend, of which Chinese dollar real estate bonds fell sharply. Last week, the return on US investment grade bonds was – 0.42%, the worst yield rose 7bp to 2.62%, the return on us high-yield bonds was 0.07%, and the worst yield fell 2bp to 4.58%. The return on Chinese dollar investment grade bonds was – 0.74%, and the worst yield rose 18bp to 2.91%. The return of Chinese dollar high-yield bonds was – 6.80%, and the worst yield rose 298bp to 21.62%. In the industry, the yields of real estate, finance and urban investment were – 8.67%, – 2.72% and – 0.03% respectively.
Changes in Chinese dollar real estate bonds
Last week, the price of real estate bonds rose slightly and fell sharply. In the list of increases, Sichuan Languang Development Co.Ltd(600466) , Guorui real estate, Zhengrong real estate and contemporary real estate increased by 4.01%, 2.31%, 1.50% and 1.49% respectively. In the list of decline, Dafa, times China, Hejing Taifu and Yuzhou real estate fell 39.03%, 34.75%, 32.44% and 32.35% respectively.
In terms of events, it has been reported recently that real estate M & A loans are no longer included in the “three red lines”, and some central enterprises and state-owned enterprises are contacting high-quality projects in core cities in many ways. Meanwhile, a number of large and medium-sized banks said that they had made quota arrangements for real estate M & A loans and other businesses, and recently received relevant notices from regulators requiring financial institutions to provide financial support for M & A in the real estate industry. In terms of rating, on January 11, Fitch rating announced that it would adjust Shimao’s long-term issuer default rating from “BB” to “B -“, and all ratings maintained a negative rating observation state.
Risk tips
The pace of raising interest rates has accelerated; The cash flow of some real estate enterprises continues to deteriorate; Global liquidity margins tightened.
