Chinese assets suddenly skyrocketed.
On the evening of November 17th, Chinese assets collectively surged, the renminbi rebounded significantly, and the gains in the FTSE A50 China Index futures continued to expand. Among them, the offshore RMB rose above 7.22 points against the US dollar during the trading session, with a daily increase of over 300 points; The onshore RMB rose by over 500 points against the US dollar during the day, reaching a new high since early August; The FTSE A50 China Index futures rose to 0.67%.
On November 17th, the People's Bank of China, the State Administration of Financial Regulation, and the China Securities Regulatory Commission jointly held a symposium on financial institutions to study recent key work in real estate finance, credit investment, and debt risk resolution on financing platforms.
Currently, foreign institutions are increasing their holdings of RMB bonds. According to the latest October interbank bond market briefing released by the Shanghai headquarters of the People's Bank of China, the scale of increased holdings of interbank bonds by foreign institutions in October reached 42.3 billion yuan, reaching a new high in the past four months. This is the second consecutive month that foreign institutions have increased their holdings of RMB bonds. In September of this year, foreign investors bought a net 18.9 billion RMB bonds.
In addition, the "stock god" Buffett has also made significant moves. On November 17th, Warren Buffett's Berkshire Hathaway company issued Japanese yen bonds worth 122 billion yen. This move has sparked many speculations from the outside world, with some analysts pointing out that Buffett may invest more funds in the Japanese stock market.
China's asset boom
On the evening of November 17th, Chinese assets collectively surged, the renminbi rebounded significantly, and the gains in the FTSE A50 China Index futures continued to expand.
Specifically, the offshore RMB rose above 7.22 to a high of 7.21 in intraday trading against the US dollar, and rose by over 300 points during the day.
The onshore Chinese yuan rose by over 500 points against the US dollar within the day, briefly breaking 7.2 to 7.1911, setting a new high since early August.
The FTSE A50 China Index futures rose to 0.67% at one point.
On November 17th, the People's Bank of China, the State Administration of Financial Regulation, and the China Securities Regulatory Commission jointly held a symposium on financial institutions to study recent key work in real estate finance, credit investment, and debt risk resolution on financing platforms.
The meeting pointed out that the next step is to continue to increase policy implementation and work promotion efforts, and persistently create a good monetary and financial environment. We need to implement the requirements of cross cycle and countercyclical regulation, focus on strengthening balanced credit allocation, and comprehensively consider credit allocation for the second two months of this year and the beginning of next year, in order to promote stable economic growth in China with the stability of credit growth. We need to optimize the structure of fund supply, activate existing financial resources, increase financial support for major strategies, key areas, and weak links, and enhance the sustainability of financial support for the real economy.
The meeting emphasized that all financial institutions should meet the reasonable financing needs of real estate enterprises with different ownership equally, and not hesitate to lend, withdraw or cut off loans to normal operating real estate enterprises. Continue to use the "second arrow" to support private real estate enterprises in issuing bonds and financing. Support real estate enterprises in reasonable equity financing through the capital market. We need to continue to cooperate with local governments and relevant departments, adhere to the principles of marketization and rule of law, increase financial support for guaranteed delivery properties, and promote industry mergers and acquisitions. We should actively serve the construction of the "three major projects" such as affordable housing, accelerate the supply side reform of real estate finance, and promote the construction of a new model for real estate development.
In addition, Dunhe Asset Management's latest view points out that at the end of the interest rate hike cycle, the US dollar mostly peaks and falls before US bond yields. Once the US dollar index trends downward, even if US bond yields are difficult to significantly decline, A-shares and Hong Kong stocks are expected to rebound from the bottom driven by global liquidity.
In the overseas market, US stock futures continued to rise, with the Dow Jones index futures up 0.25%, the S&P 500 index futures up 0.22%, and the Nasdaq 100 index futures up 0.02%.
European stocks rose overall, with the Stoxx 600 index rising 0.92% and expected to rise 2.7% this week. The FTSE 100 index in the UK rose 0.95%, the CAC40 index in France rose 0.85%, and the DAX30 index in Germany rose 0.79%.
Foreign investment has exploded to over 40 billion yuan
According to the latest October interbank bond market briefing released by the Shanghai headquarters of the People's Bank of China, as of the end of October, overseas institutions held 3.24 trillion yuan of interbank market bonds, accounting for approximately 2.4% of the total custody volume of the interbank bond market.
This means that overseas institutions increased their holdings of RMB bonds by 42.3 billion yuan in October, reaching a new high in the past four months. This is also the second consecutive month that foreign institutions have increased their holdings of RMB bonds - in September of this year, foreign investors bought a net 18.9 billion RMB bonds.
Different from the foreign capital inflow into inter-bank deposit receipts in September, in October, more funds flowed into high-grade varieties such as treasury bond and local government bonds, most of which were short-term (with a maturity of less than 3 years).
Currently, with the continuous improvement of the internal and external environment, China's foreign exchange market and cross-border capital flows continue to operate smoothly. Wang Chunying, Deputy Director of the State Administration of Foreign Exchange and spokesperson, recently stated that after the net increase in domestic bonds held by foreign investors in September, the investment scale further increased in October, and the domestic economy continued to rebound and improve, further enhancing the confidence of foreign investment in allocating RMB assets. In the complex and severe international situation, the safe haven attribute of RMB assets has also gradually strengthened.
Wang Chunying also stated that the market generally believes that the Federal Reserve's interest rate hike cycle is approaching its end, and the spillover impact on the international financial market will be mitigated. With the continuous improvement of the internal and external environment, China's foreign exchange market and cross-border capital flows are expected to continue to maintain a stable operating trend.
In October of this year, one new overseas institutional entity entered the interbank bond market. By the end of October, a total of 1110 overseas institutions had entered the market, of which 541 had entered the market through direct investment channels, 814 through the "Bond Connect" channel, and 245 through two channels at the same time.
In October, the current bond trading volume of overseas institutions in the interbank bond market was approximately 1.17 trillion yuan, with a daily average trading volume of approximately 65 billion yuan.
Nomura Securities believes that the flow of RMB offshore bonds further improved in October.
Buffett's sudden move
On November 17th, Berkshire Hathaway, a subsidiary of Warren Buffett, issued Japanese yen bonds worth 122 billion yen (approximately 6 billion yuan) with maturities ranging from 3 to 35 years.
This move has sparked many speculations from the outside world, with some analysts pointing out that Buffett may invest more funds in the Japanese stock market.
It is worth mentioning that this is Buffett's second issuance of Japanese yen bonds within the year. In April of this year, Berkshire Hathaway issued five yen denominated bonds totaling 164.4 billion yen (approximately 7.9 billion yuan).
According to external analysis, Buffett is likely to increase his bets on Japanese stocks after this round of issuance of Japanese yen bonds.
In April of this year, Buffett visited Japan and met with executives from some trading companies. In the following June, Buffett announced that he would increase his holdings in stocks of companies such as Mitsubishi Corporation and Itochu Corporation, boosting foreign confidence in the Japanese stock market and pushing it to a 33 year high.
Currently, Berkshire Hathaway has become one of the most eye-catching overseas investors in the Japanese stock market.
An analyst at Daiwa Securities pointed out that Buffett may take Japanese banks, insurance companies and automobile manufacturers as his next investment target.
However, some analysts have pointed out that Berkshire's current issuance of Japanese yen bonds is likely to be aimed at locking in current lower interest rates and financing at lower costs.
Recently, Bank of Japan Governor Kazuo Noda hinted that Japan is moving towards a stable inflation target of 2%, which is a prerequisite for policy normalization. This statement has also raised concerns in the market about the early shift in Japan's monetary policy.
If Japan truly abandons the last remaining negative interest rate system in the world, companies such as Berkshire Hathaway may face higher financing costs. This may also be one of the reasons why Buffett is rushing to issue Japanese yen bonds at the moment.