Another monetary wrestling: overseas capital to reduce the tide of RMB bonds

21st Century Business Herald reporter Chen Zhi Shanghai report

Overseas capital reducing RMB bonds is quietly ebb.

Recently, the International Financial Association (IIF) released the global flow flow report showed that the amount of funds flowing in the domestic bond market in China was about 2.5 billion US dollars (about 16.75 billion yuan) in June. Tongyue average funds flowing 46.4 billion yuan.

On July 22, the latest bond custody data released by the Central Settlement Company showed that as of the end of June this year, the RMB bond custody of overseas institutions was 3289.027 billion yuan, a decrease of 95042 billion yuan from the previous month.

In comparison, the amount of RMB bonds reduced by overseas capital in June is almost the same as that of the past three months, and it has not further expanded due to the deepening of the spread between China and the United States.

"The market is generally expected that with the recent promotion of a series of measures to enhance the convenience of bonds in domestic capital investment, coupled with the stable growth trajectory of the Chinese economy, global capital has begun to return to the RMB bond market." A foreign exchange foreign exchange in Hong Kong region is in Hong Kong. Trader pointed out to the 21st Century Business Herald.

However, as the Fed continued to raise interest rates in the second half of the year, the spread of Sino -US interest spreads expanded, and how to curb overseas capital to continue to reduce the renminbi bonds is a major challenge for relevant departments.

"Especially overseas capital reduction of RMB bonds is increasingly closely related to the short -selling of the RMB exchange rate." The above -mentioned foreign exchange traders pointed out. For the reason, since this year, many overseas speculative capital will reduce the holdings of RMB bonds with capital outflows, and the renminbi exchange rate will be depreciated rapidly to achieve the purpose of profit -selling RMB exchange rate profit.

"The rapid depreciation of the RMB exchange rate from April to May is largely due to the global capital reduction of RMB bonds in February and March, and speculative capital seize the opportunity to speculate on capital outflow and the RMB to depreciate rapidly." The above foreign exchange traders bluntly.

It is worth noting that relevant Chinese departments are actively taking targeted measures to curb this speculative short -selling behavior.

In late April, Wang Chunying, deputy director of the Foreign Exchange Administration, said that the phased adjustment of China's cross-border securities investment in April to March is a natural response to the market under the complex international economic and financial situation, but it has not changed the overall balance of my country's cross-border funds. Essence In the first quarter of this year, the cross -border funds of domestic accounts and direct investment remained surplus, supporting China's cross -border income and expenditure and domestic foreign exchange supply and demand to maintain a basic balance.

"Short -term fluctuations in cross -border securities investment do not represent the overall pattern of foreign capital flow, and it cannot represent long -term investment willingness of foreign capital. With the market's digestion and expected release of some short -term factors, overseas institutions will return to Chinese securities investment. Long -term value investment is still the main consideration. "She emphasized.

Since then, relevant departments have successively introduced a number of measures to simplify overseas investors entering the Chinese market, including rich types of assets.

Xia Chun, chief economist of Yinke Holdings, told reporters that at present, overseas investment institutions no longer regard Sino -US interest spreads as the main basis for investing in RMB bonds. They realized that even if the Federal Reserve raised the benchmark interest rate to 3.5%-4%at the end of the year, the 10-year US debt yield hit 4%. (Names of yields 率 inflation) is -2%. In contrast, although the 10 -year China Treasury yield hovering around 2.8%, in view of the maintenance rate of China ’s inflation at about 2%, the actual return of China Treasury bonds is 0.8%, which is still higher than US debt.

Xia Chun believes that the second half of the year ’s overseas capital returns to the RMB bond market, and there are two major booster factors: First, the Chinese economy returns steady growth trajectory, and Chinese government bonds have more investment security; It is still low, and there will be huge structural positioning space in the future.

Who is reducing RMB bonds?

"Frankly speaking, we underestimated the impact of Sino -US spreads on global capital reduction of RMB bonds." A director of the asset allocation department of a large Wall Street asset management institution revealed to reporters.

Earlier this year, although the market's general expected Sino -US monetary policy differentiation will lead to the continuous narrowing or even inverted Sino -US interest spreads, most overseas asset management institutions believe that this move will not trigger global capital to greatly reduce RMB bonds.

In February, overseas capital reduced 35.1 billion yuan bonds through bond channels, but the financial market did not care about it at first, because the Chinese foreign trade continued to highlight the high degree of prosperity at that time, the RMB exchange rate reached the year high of 6.3, and the investment institutions still expected that the RMB exchange rate maintained rate was maintained. strong.

"Even many investment institutions believe that the outflow of overseas capital from February to March was a normal phenomenon, because at that time, the risk preferences of European and American asset management institutions dropped sharply, and a large amount of funds were transferred from emerging markets back to Europe and the United States." The head of the department analysis.

In his opinion, the two fundamental reasons that truly triggered overseas capital to reduce RMB bonds: First, China encountered an epidemic in March, which led to a decrease in foreign trade prosperity, the RMB exchange rate continued to fall, and the RMB bonds lost the sought after arbitrage capital; the second was March in March; in March The Federal Reserve's interest rate hike trigger, the spread of China and the United States continued to deepen, forcing some overseas unincorporated wealth management products to evacuate RMB bonds.

In the past three months, the maintenance of RMB bonds is mainly based on overseas illegal wealth management products and arbitrage capital. They are most sensitive to the decline in the RMB exchange rate and the spread of China and the United States, especially in the exchange income of RMB bonds and no risk interests. When the double -dual -dual -back adjustment, these overseas capital will quickly reduce their holdings. In contrast, the Overseas Central Bank and Sovereign Fund have not appeared significantly reduced their holdings. Wang Chunying said in late April that the adjustment of cross -border capital flow in securities investment items was a natural response to the market under the complex international economic and financial situation. With the digestion of some short -term factors and the release of some short -term factors, overseas institutions will return to Chinese securities investment, and long -term value investment is still the main consideration. During the period in late March, the net outflow of foreign capital under the bond item decreased by 39%from the previous month. It has further eased since April, and the inflow of funds will be restored in some trading days.

However, this natural response has been used by some overseas speculative capital, which has become an important theme for the expansion of the pressure of hype capital outflow and the rapid depreciation of the RMB exchange rate.

Data data shows that from mid-April to mid-May, the RMB exchange rate once quickly fell from 6.36 to 6.81, with a cumulative decline of about 4,500 basis points.

"This has caused a vicious circle, leading to the continuous reduction of RMB bonds in May and June." The above -mentioned foreign exchange traders pointed out. Specifically, the rapid decline in the RMB exchange rate has led to a large reduction in the amount of RMB bond assets into US dollar valuation assets, so the amount of increased amount has been reduced, so it has to continue to reduce the risk of RMB bonds. But this move left more room for overseas speculative capital hype.

"Although the scale of overseas capital has reduced the holding of RMB bonds in the past 5 months, it is not enough to affect the balanced trend of China's capital cross -border flow. "The above foreign exchange traders pointed out.

Reshape the confidence in overseas capital investment

In order to boost the investment confidence of overseas capital on RMB bonds and curb the new speculative short -selling RMB exchange rate, the relevant departments quickly prescribed the right medicine.

At the end of May, the Central Bank joint Securities Regulatory Commission and the Foreign Exchange Bureau issued the "Relevant Matters Regarding the Investment in the Chinese Bond Market", which will be implemented on June 30.

On July 4, the Bank of China, the Hong Kong Securities and Futures Supervision Commission, and the Hong Kong Financial Administration issued a joint announcement to conduct cooperation between the Hong Kong and the Mainland interest rate exchange market, and guide domestic and foreign investors to pass the infrastructure of the financial market infrastructure through Hong Kong and the Mainland. Connect, participate in domestic interest rate exchange products investment, effectively meet the requirements of interest rate risk management of overseas investors.

From the perspective of many people in the industry, the former is mainly aimed at the relatively low status of overseas capital allocation of RMB bonds. By further simplifying the procedures for overseas institutions to invest in domestic RMB bonds, it attracts them to speed up the pace of allocation; Interest rate risk and spread loss caused by inverted hanging.

A large -scale macroeconomic hedge fund manager of Wall Street revealed to reporters that after these new measures were released, they were re -evaluating the value of the allocation of RMB bonds.

"During the period from 2-5, in the absence of interest rate exchange derivatives hedge, the risk of interest spreads in China and the United States, we can only choose to reduce some RMB bonds to avoid risks. In the future, if we can buy interest rate exchange derivatives, we To solve the problem of interest rate risks and interest differences, you can adopt a long -term holding of interest rate risk hedging strategies to lock in the return of stable investment. "The above hedge fund manager pointed out.

He also said that although overseas capital leaving the market in the first half of the year, most asset management institutions are still optimistic about the potential of RMB bonds. First, the linkage of bonds in China and the global financial market is relatively low, and it has certain safe -haven asset attributes. Second, compared to other emerging market countries facing high inflation, foreign trade deficit expansion, continuous shrinkage of foreign exchange reserves, increased economic recession pressure, etc. The problem, China does not have any troubles in this area, and the investment safety of RMB bonds is even more prominent; the third is that the proportion of global capital allocation of RMB bonds is still low. Investment bonuses that can obtain capital inflows in advance can obtain capital bonds in advance.

With the return of China's economy to a stable growth trajectory, the Overseas Central Bank and Sovereign Fund Fund are accelerating the pace of allocating RMB bonds. In the case of the Fed's continued sharp interest rate hike leading to a decline in US bond prices (rising US debt yields), they need to speed up the decentralized allocation of reserves assets to alleviate the pressure on the scale of foreign exchange reserves.

In contrast, under the influence of the US dollar's new high, the pace of global arbitrage capital and illegal wealth management products returned to the RMB bond market was slightly slow.

In Xia Chun's view, the market began to realize that after eliminating inflation and exchange rate factors, RMB bonds still have high attractiveness. In the second half of the year, these capitals may re -increase RMB bonds. If the Fed's risk of economic recession has increased the pace of interest rate hikes, the US dollar index will rise, and global arbitrage capital will return to emerging markets, and China is undoubtedly their first choice for investment.

International Financial Association (IIF) economist Jonathan Fortun said that multiple factors will affect global capital flows in the next few months. Among them, global inflation and China's economic development prospects will be two major points. If China's economy continues to grow steadily, more capital will flow into A shares and RMB bonds as an important risk aversion measure to hedge the risk of global economic recession.

"The trend of global capital continued to increase the RMB bonds will not be reversed due to the departure from the presence in the first half of the year, because asset management institutions have realized that with the steady growth of China's economy, long -term addition of RMB bonds can share the globalEconomic development dividends. "The hedge fund manager bluntly said.

(Coordinating: Ma Chunyuan)

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