Comment: Chinas low interest rate environment with fire panda bonds non -Chinese

Source: Bloomberg

With the decline in financing costs in the domestic bond market in China, the Panda Bond market ushered in a wave of issuance this year and attracted some global multinational companies to rank among the issuers.Bring more international elements.

Panda debt, a variety of financing for overseas issuers in the RMB bond market in China this year.According to Bloomberg's summary data, the domestic exchanges and the inter -bank bond market have issued a total of 122.5 billion yuan (RMB, Same as S $ 22.6 billion) on Tuesday (July 23) this year, a year -on -year increase of nearly 50 %;Among them, the main body of Chinese -funded actual control issued 37 billion yuan, surpassing the whole year of last year, and Shinko Bloomberg had a new high since 2005.

The financing cost of the RMB bond market in China is far lower than the overseas US dollar bond market, which has attracted well -known multinational companies such as Bayer, BASF, and Shangri -La to issue RMB bonds for the first time in the shore market this year;The panda debt market for the second consecutive year was used to raise funds.

"This year's panda debt is becoming more and more popular among international company issuers," Fang Zhongrui told Bloomberg News, "Many international companies have been studying how to invest in China and establish a place in ChinaAnd seriously consider how to use the shore capital market to raise funds for these business, and then expand business. "

The current Federal Reserve interest rate is still high, and the timing and rhythm of start -ups are not clear.As the People's Bank of China reducing policy interest rates on Monday, the bond market has a strong expectation of maintaining a low interest rate environment in the future.In the environment with obvious differences between China and the United States, diversified subjects are expected to continue to pour in markets in China to issue bonds to lock in cost advantages.

Bloomberg summary data shows that since the since this year, the issuance interest rate center of the panda bond market has fallen to 2.44%, of which 10 non -Chinese subjects have average financing costs of 2.47%, both of which are significantly lower than last year and were Bloomberg last year and were Bloomberg.The lowest data in 2005 has the lowest data.

Fang Zhongrui predicts that the issuance scale of the Panda Bond market this year will reach a new high, and the supply in the second half of the year is expected to be compared with the first six months of this year.He pointed out that more financial institutions planned to issue panda bonds in the next two months, but did not disclose specific issuance subjects.

Looking at the entire market, China's current low interest rate environment also provides a good opportunity for domestic enterprises' pressure -setting financing costs.Data show that the average issuance interest rate of domestic credit bonds has been about 2.68%since this year, a decrease of more than 100 basis points from the level of last year, a new low since 1996.

The interest rate cut of the People's Bank of China this week has consolidated the low interest rate expectations of the RMB bond market. The yield of the three -year AAA corporate bonds of China Bonds then refreshed the record low to below 2.06%.On the other hand, although Fed officials have considered at the consideration of interest rate cuts in September, the interest rate cut has not yet reached the point of nailing on the board.