Since July, the rapid rotation of large categories of assets and the rebalancing of the performance price ratio of stocks and bonds have led to great concern in the bond market and the short-term and long-term allocation strategies of various products. The industry believes that recently, with the safety cushion of valuation, superimposed stock market adjustment, and the international situation turbulence, the national debt is slightly under pressure. At the same time, Beishang capital has fluctuated frequently recently, and in July, there are often tens of billions of outflows. According to the agency, the medium and short end credit products are more in line with foreign investment aesthetics due to coupon + declining return and other reasons. Stock market and bond market pull each other in the role of seesaw.
will the economic rebound in the second half of the year continue? Has bond market volatility been adjusted in place? What is the short-term and long-term trend of bond products? How does seesaw affect both sides of stock market and bond market? Why do foreign capital enter and leave on a large scale recently? Has the style of allocating long-term assets by foreign investors changed? Has the monetary policy margin been tightened? Hua Changchun
Hua Changchun, chief economist of Guotai Junan, first finance and economics held a dialogue with Hua Changchun
Hua Changchun, chief economist of Guotai Junan. Main points of Hua Changchun are as follows: the economic recovery is solid, the loose expectation is reduced, the future operation of the central bank will be inclined to broaden the credit, and the adjustment of the bond market will be close to place; if the interest rate is too cautious, more opportunities can be considered for credit bonds; from the perspective of northward funds, active capital trading is obvious, and passive funds are, The high activity of trading capital does not mean that the risk preference is reduced.
first finance and Economics: we see that July is the first month of the second half of the year. How can we look at the overall macroeconomic situation of the first month? Is there a better rebound as we had expected?
Hua Changchun: judging from the current data in July, we think that the economy will continue to recover. If GDP in the second quarter is 3.2%, I believe our forecast in the third quarter will be 6.3%. Because last month, it was also affected by some floods. At present, the impact of flood disasters is declining. The other is that we have also seen some new industries, and their performance may be a little stronger. The relative kinetic energy of the link is particularly strong. You can see that it is basically realized from March to May. In fact, from June to August, it was a moderate rebound momentum, but this kinetic energy means that on the one hand, at that time, our consumption was relatively weak. At that time, new infrastructure activities appeared. Now, the infrastructure activities are still relatively strong, and the construction has not slowed down. At the same time, our consumption and manufacturing gradually began to recover At this time, the kinetic energy is still maintained in June to August at least.
first finance and Economics: let’s look at the current market situation. Since May, there has been a fluctuation in the bond market. What do you think is the main reason? Has the time for volatility passed?
Hua Changchun: first, we have also seen that the central bank has indeed tightened some funds, and there are some tightening at the margin. On the other hand, there are more actions to broaden credit. Therefore, at this time, the market has an expectation for the interest rate of bonds. It is relatively speaking that the interest rate is going higher, not because of inflation. Another wave of adjustment was made in June, and the adjustment in June was actually due to stocks The ticket market is also very active. It attracts some funds. There is a seesaw factor in it. Therefore, there are three reasons for the adjustment in May and June. From the middle of July, it is relatively better. On the one hand, on the margin of funds, we also see that the central bank has a little loose. On the other hand, the stock fluctuates from 2700 to 3000, and now it rises to 3100-3500. Then it does not continue to break through upward. Relatively speaking, it enters a stable period, and the bond market opportunities at this time There are some trading opportunities.
first finance and Economics: the stock market and the bond market have a seesaw effect. Although you mentioned that the stock market has been fluctuating for some time, it is true that there are still some occasional corrections in the stock market. What kind of impact will this have on the bond market in the future?
Hua Changchun: in fact, there are two aspects of seesaw. If the seesaw occurs in intra day trading, it is more a reflection of the psychological expectations of trading fund managers. For example, the stock market is particularly strong. At this time, fixed income fund managers feel that funds should go to equity, which is relatively short. If we take a longer time, there is indeed some capital flow. The most typical is that the debt base is sold by the market. In this way, after the sell-off, people will buy equity funds. Therefore, there is a flow of funds at this time. Therefore, from this point of view, once the equity market enters a period of turbulence, the pressure on the bond market will gradually weaken. Therefore, at this time, I think that the interest rate bonds will fluctuate for a period of time at about 3%, but further down, it will be more inclined to our economic trend and inflation trend. Look at the fundamentals.
Hua Changchun: we are still cautious about interest rate bonds. For credit bonds, there are still many opportunities for fixed income of credit bonds. However, we should control the duration. We mainly eat the sinking rating of high coupon city investment. Why such an idea? First, you mentioned the situation of the economy just now. We think that the economy will go up step by step in the next three quarters. It may be 6.3% in the third quarter, and the security in the fourth quarter may rise to around 7%. In the first quarter of next year, of course, if the month on month ratio is relatively stable, the year-on-year increase may be more than 12%. In such a situation that the economy is gradually going up, inflation is relatively stable. I think the interest rate center should be around 3%, or even go up a little. For example, the trading range may be 3% – 3.5% If it is between 3% and 3.5%, the allocation of interest rate bonds is OK, but there are few obvious trading opportunities. At this time, we are more inclined to credit bonds. In particular, I think we should pay a little attention to the duration. As the economy recovers better in the recovery process, the corresponding monetary policy tends to shift from neutral to marginal The more likely it is to be tight. The later this time is, the worse the duration may be. Therefore, we suggest that we should control the duration while eating high ticket rates.
Hua Changchun: in fact, convertible bonds reflect a large degree of correlation between listed companies and equity and the stock market. We still think that convertible bonds, in the big market, should pay more attention to some places with flexibility. If you go down to convertible bonds, in fact, the overall valuation is not very cheap. We are worried about whether interest rates will appear in the process of equity market turbulence. If it is really a trend upward trend, then on the one hand, the equity market will kill valuation, and on the other hand, interest rates will be favorable. Therefore, we think that this opportunity is obvious, but we should be careful. At the same time, there will be downward adjustment of equity market and killing of valuation A possibility.
first finance and Economics: we have seen large-scale capital inflow and outflow since June. Compared with the second quarter, foreign capital has frequently flowed out in the scale of 10 billion. What is the reason for this? Compared with the previous large-scale inflow, why is there such a difference?
Hua Changchun: it’s like this. When we study the northbound fund, we basically look at it from the trusteeship. For example, foreign investment banks, custody of some funds, more trading funds, is active hedge funds. Because they have faster requirements for clearing and settlement, that is, shorter time requirements. There are also some allocation funds. Generally speaking, if the allocation funds of foreign capital are long-term, they are placed in foreign banks. Therefore, the requirements for clearing and settlement are not so high, and they are relatively stable. Of course, there are also some Chinese funded funds, including domestic funds, which are mostly placed in Chinese funded financial institutions. However, generally speaking, they operate in a reverse direction. They will change only when there is a large fluctuation. Well, from the perspective of these custodians, we can actually see such a change in the current funds. Basically, if the funds are transactional, the changes are mainly liquidity. In other words, it is the hedge fund, the active fund, and the money is in a big change. In the past two years, we have constantly included and expanded the international index, so it has a new increment of funds, which is relatively stable. This year’s index expansion and inclusion is relatively no, so this time often reflects such a change in trading funds.
first finance and Economics: compared with the A-share investors, they are ordinary investors. In fact, the overseas layout of A-shares is basically some global long-term portfolio, and the insurance portfolio is long-term. Will this large-scale import and export change the previous layout pattern?
in fact, if they don’t exchange their money with the overseas fund for more than a year, their allocation strategy will not change for a long time. So the combination of them will not change a lot. In other words, we have observed that since April, these trading funds will not buy food and drinks. They are now buying medicine and technology, and relatively speaking, they are big in and big out, and there is no real style switch. Therefore, on the one hand, we can see that the long-term funds are rarely deployed and relatively stable. For the other active trading funds, I think they are relatively more active, which does not necessarily reflect the decline in risk preference, but rather that it is more likely that I think the risk preference has increased, just because of political factors, there may be such a factor.
first finance and Economics: let’s take a look at the liquidity problem. In fact, the LPR anchoring MLF has not been adjusted for four months. Next, according to the requirements of the NPC and CPPCC on macro policy, including the requirements of the executive meeting of the State Council, do you think there will be an obvious adjustment in the next few months?
Hua Changchun: I don’t think the possibility of adjustment is high. Frankly speaking, the main reason is that on the one hand, the upward trend of our economic trend in the next three quarters is relatively clear, and the downside risk is also relatively limited. Therefore, the downward risk mainly lies in overseas, because at present, the financial support policies of Europe and the United States have an expiration need The need for replacement. China’s own epidemic situation has been well controlled. The foundation for economic recovery is very solid. First, infrastructure construction, then real estate. Now, there will be an endogenous demand for consumption and manufacturing. If we go up, that is to say, we need to lower interest rates more