Industry News

Homepage  >   Newsletter  >  Industry News

The Lower of the Reserves Release the Tension of Capital Flow

Issued at:2018-06-28      Views:2117   

On April 24, the bank financing area tension persists, the Shanghai stock exchange government bonds reverse repurchase GC001 rate rose to 10.6% in early trading, the shenzhen stock exchange, the overnight to 7 days the repo rates are open sharply higher.

From the open market, the central bank this week continued the peak "cut" of the operating train of thought. On Monday (April 23rd), the central bank open market completely hedge the amount due. On Tuesday (April 24), the central bank open market has carried out 30 billion seven-day reverse report, the open market net 30 billion yuan.

Tension is related to tax on the financing side. Speedy securities, managing director of Li Jilin believes that was the last deadline of taxes on April 18th, consider paid for the late and go to the bank for process consumes time, then tax period of time should be the greatest influence on the financing side on April 16 ~ 20 April, disturbance factor is not on the surface of the money this week to pay taxes.

According to the first financial journalist statistics, since April, the central bank in the open market the cumulative net has reached 390 billion yuan, on April 18 and 19 April two largest trading with tax disturbances on the financing side, the central bank net quantity was as high as 340 billion yuan.
In a number of industry insiders point of view, on the premise of liquidity supply reasonable, plus lever jacked up the financial institutions to buy debt capital requirements, is the root cause of the recent increase more than expected on the financing side nervous.

And in the case of overnight interest rates higher than the national debt interest rates, what is silver and the levers of power? Li Jilin analysis, general fund may choose to add leverage when money is tight, in pursuit of a higher capital gains. But as long as the prices the same amount of securities in the day, then the capital gains income can cover the cost of capital.

In his view, the upfront capital of loose, significant arbitrage space, more institutions increased leverage, after the expiration of funds, and leveraged investors consider the tax period affect the time is limited, the future must bring loose liquidity reduction period, will choose to continue leverage, rather than selling assets lever.