Debt Risk Superimposed High Leverage Caused Regulatory Concerns

China Securities Depository and Clearing Co., Ltd. issued a notice on "further improvement of China's settlement, pledge repurchase, refinement and dynamic adjustment of risk management mechanism".

According to the notice, from the beginning of this week, China's settlement will dynamically adjust the conversion rate of the standard coupon of some repo bonds, and gradually improve the differential dynamic management mechanism of the pawns.

For the purpose of the adjustment, the central bank's interpretation is "improving the effectiveness and delicacy of the daily market correction and dynamic adjustment management of the bond pledge repurchase business", and at the same time, the dynamic management of the buyback bond market will also be conducive to the standardized development of the exchange bond market and guard against systemic risks.

Reporters learned that the exchange bond market

As well as the recent emergence of debt credit risk has aroused the concern of regulators. Before this, there were already various hearsay cases in China. Compared with market expectations, the new regulation was less severe, and its goal was refinement and fine-tuning, aiming to alarm the market and prevent it from happening.

Although the main tone is more moderate, when talking about the impact of the new regulation on the market, many investment managers interviewed by reporters think that the market will cause some disturbance in the near future.

In addition, the IPO opened more time than expected, and the Fed raised interest rates and other factors.

"Under the current interest rate environment, the market nerves are very destructive," a private fund bond fund manager told reporters, after the bond market is hot, and the cost of capital is low, many institutions investment leverage is at a relatively high level, the new regulation is designed to limit the level of market leverage, it will inevitably cause shocks to the market, triggering short-term market callbacks.

In addition, market participants speculate that the new regulation's dynamic fine-tuning pledge rate is also designed to allow the market to discover credit risks on its own and to avoid a collective stampede in the high risk period of credit risk in the downside of the economy.

In fact, before the new rule of the exchange rate bond market came out, in December 8th last year, the central bank issued a 149 article, which did not meet the requirements.

The implementation of the moratorium has greatly reduced the pledge of corporate bonds, triggering a sharp pullback in the bond market in a short period of time, and the stock market also created a decrease of more than 5% on that day.

Turning to the difference between the exchange pledge rate and the previous one, market participants say that the adjustment of the CSI is more moderate, not to cancel all claims pledge, and that it will reserve the market for the market and digest time, which is not the same as that of Article 149.

It is worth mentioning that although the bond market may be short term pressure, many fund managers have said that the bull market has not ended. The factors such as monetary easing, asset shortage, and economic downturns that support bond market strength have not changed. After the adjustment, the bond market will face a good investment opportunity.

Qiu Xinhong, head of the Indo Australian bond account, told reporters that from the three point, we can infer that the new rule can not be compared with that of Article 149.

"First of all, the rate of hypothecation is not in place, but by the side.

Secondly, the market has already expected the new regulations, and the official documents are lower than expected.

Third, compared with the end of 2014, the current capital market is more relaxed.

Qiu Xinhong judged that the introduction of the new rules would have a short-term impact on the bond market, but in the medium to long term, market adjustment also brewed a better buying opportunity.

There is no coincidence.

A private equity fund manager in Shanghai told reporters that although the impact of the new regulation should not be underestimated, "it is also dangerous. If there is a short stampede, it will also bring opportunities for next year's configuration."

A public fund manager in Shanghai also pointed out that the introduction of this article is only a change in the trading session, which will not affect the market itself.

Under the current circumstances, from the capital side to the fundamentals, the bond market has not changed much.

"Looking back, last year, No. 149 cited the debt market in such a turmoil, it proved to be a good opportunity to buy, this is probably the same."

The cattle have been walking for more than a year.

Short term risks are accumulating.

Following the opening of IPO and the risk of debt risk, the central bank issued a notice recently that it would dynamically adjust the repurchase rate of exchange bonds, so as to regulate the development of the bond market and prevent systemic risks.

Reporters interviewed a number of bond market participants believe that the introduction of the new rules on the bond market will have a certain impact in the short term, but due to the smaller volume of corporate bonds, and not all of the loss of qualification, deleveraging and last year's Article 149 can not be the same.

As the fundamentals of the economy remain unchanged and the capital market is still loose, the bond market may face better investment opportunities after a short-term adjustment.