The State Council’s request for the 1.39 trillion yuan of local debt issued in advance by the National People’s Congress is expected to be basically completed before the end of September. Experts believe that this year's local debt will play a role in stabilizing investment and promoting consumption, and will promote short-term support in areas such as transportation and water conservancy. Counting the scale of local bond issuance throughout the year, the supply of local bonds in the first quarter may reach 1 trillion yuan.
Northeast Securitiesfixed incomeAnalystIn an interview with the "Securities Daily" reporter, Liu Chenhan said that the reason for requiring 1.39 trillion yuan of local debt to be issued as soon as possible, from the current economic situation,PMIIt is already below the dividing line of glory and stagnation, and the downward pressure on economic growth is increasing. It is urgent to base the infrastructure and make up the shortcomings. The infrastructure investment is closely related to the finance, and the “opening the door is blocking the door” and hitting the shadow.bankIn the case of local government investment and financing, the support for infrastructure has gradually weakened.
Liu Chenhan said that from the history of past bond issuance, since the two sessions have not yet reviewed and approved the issuance of debts, the issuance of local bonds in the first quarter is small, and the second and third quarters are the peak of issuance. In the first quarter of 2017, the circulation accounted for 10.9% of the annual circulation, and the circulation in the first quarter of 2018 accounted for 5.4% of the annual circulation. The main purpose of the State Council’s request for issuance as soon as possible is to hope that the bond issuance funds will play a role as soon as possible and stabilize investment to promote consumption.
For example, Li Chang, a researcher at the Financial Research Institute, told the "Securities Daily" reporter that this time, some new debt limits will be issued and the time for completion of the issuance will be moved forward, so that local governments can start the issuance of debts in advance, effectively avoiding the stagnation of the issuance of debts in the first half of the year. Happening. At the same time, under the background of the downward pressure on the economy, the local government funds are relatively tight, requiring local bonds to issue funds aimed at accelerating local government expenditures as soon as possible, and ensuring that key projects such as infrastructure projects are in place in advance, which is a positive fiscal policy countercyclical adjustment. which performed.
The State Council executive meeting held on January 9 called for the better play of the special debt to the current stable investment to promote consumption. Special fundraising funds should be used preferentially for projects under construction, to prevent “half-pull” projects, to support major projects within the plan, and to solve the arrears of government projects. In the place with construction conditions, we will start a number of major projects such as transportation, water conservancy, and environmental protection, and form a physical workload as soon as possible.
Li Chang believes that special debt is an important source of funding for infrastructure investment. After the large-scale issuance of local special bonds from August to September 2018, the growth rate of infrastructure investment began to rise in October of that year. In 2019, with the downward pressure on the economy, the demand for relying on infrastructure investment to support the bottom of the economy was highlighted. The early issuance of local bonds was conducive to the acceleration of infrastructure investment in the first quarter to the second quarter. At the same time, taking into account the current statistics of special debts in the social financing, the release of the rhythm of the release will also play a role in boosting the growth rate of social welfare in the first half of the year.
Liu Chenhan believes that the current fiscal policy has been exerted for a long time and requires speeding up the issuance. It is also the government's hope that the efficiency of policy implementation will be improved. The time lag of the policy's effect on the economy can be shortened as soon as possible, and the economy will be stabilized. In addition, there is currently no riskinterest rateContinued downwards, has been at a historical low, and requires the issuance of 1.39 trillion yuan of local bonds issued in advance at the end of September. There is also hope that at presentinterest rateThe intention is to issue as many as possible at a relatively low level and reduce government financing costs.
Li Chang expects that the scale of local bond issuance will be around 4.3 trillion yuan in 2019. From the data of the past three years, the scale of the issuance in 2016 reached 6 trillion yuan, and the scale of issuance in 2017 and 2018 also exceeded 4 trillion yuan. Overall, the supply is still under control. If the 1.39 trillion yuan advance release quota is equally distributed to the first three quarters as required, the overall remaining issuance scale is spread to four quarters of the year, so the local bond supply in the first quarter may reach 1 trillion yuan to 1.2 trillion yuan. History is absolutely high, and there may be a certain supply shock in the short term.
(Article source: Securities Daily)