Cinda Securities(SH:601059) Xinda Securities·2025-06-20 11:44Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In May 2025, the total bond custody scale increased by 216.33 billion yuan month-on-month, 55.57 billion yuan more than in April, mainly due to the significant rise in the net financing scale of treasury bonds and policy financial bonds. The custody increments of local bonds, interbank certificates of deposit (CDs), and credit bonds decreased slightly month-on-month [3][6]. - The profit-taking sentiment after the reserve requirement ratio (RRR) cut and interest rate cut in May and the increase in government bond supply pressure were important factors affecting institutional behavior. Non-bank institutions' profit-taking sentiment heated up, and commercial banks had to take on more primary supply, increasing their liability pressure, which requires the central bank to maintain a loose liquidity environment [3][8]. - The bond market leverage ratio in May was about 107.1%, basically the same as in April and still significantly lower than before January this year. The leverage ratio of commercial banks increased slightly, while that of non-bank institutions decreased and remained near a three-year low [3][37]. Summary by Directory 1. Interest Rate Bonds' Net Financing Soared while Credit Bonds and CDs Slightly Declined, and the Bond Custody Increment Rose Significantly in May - The total bond custody scale increased by 216.33 billion yuan month-on-month in May, 55.57 billion yuan more than in April, mainly due to the significant rise in the net financing scale of treasury bonds and policy financial bonds. The custody increments of local bonds, interbank CDs, and credit bonds decreased slightly month-on-month [3][6]. - Specifically, for interest rate bonds, the treasury bond custody increment rose by 64.2 billion yuan to 90.8 billion yuan; the local bond custody increment decreased by 18.46 billion yuan to 52.23 billion yuan; the policy financial bond custody increment rose by 26.9 billion yuan to 28.21 billion yuan. For credit bonds, the medium-term note (MTN) custody increment decreased by 3.63 billion yuan to 7.37 billion yuan, and the short-term financing bill (STFB) custody volume changed from an increase of 3.36 billion yuan in the previous month to a decrease of 4.31 billion yuan. The custody scales of enterprise bonds and private placement notes (PPNs) continued to decline, but the decline narrowed [6]. 2. Non-bank Profit-taking Sentiment Heated up in May, and the Supply Pressure Increased, Leading to a Significant Increase in Banks' Bond Purchases and Higher Liability Pressure - General Funds: The custody increment decreased by 34.3 billion yuan to 81.26 billion yuan. They reduced their purchases of CDs and treasury bonds, sold STFBs and policy financial bonds, but increased their purchases of MTNs and local bonds. Relative to the stock, they reduced their allocation of bonds, especially CDs, and switched to reducing their allocation of treasury bonds and policy financial bonds [11]. - Securities Companies: The bond custody volume changed from an increase of 1.124 billion yuan in the previous month to a decrease of 1.261 billion yuan. They sold treasury bonds and policy financial bonds and reduced their sales of CDs. Relative to the stock, they also reduced their allocation of bonds [16]. - Insurance Companies: The bond custody volume changed from an increase of 99 million yuan in the previous month to a decrease of 120 million yuan. They sold local bonds, but reduced their sales of financial bonds on the Shanghai Clearing House and increased their purchases of treasury bonds. Relative to the stock, they reduced their allocation of local bonds [19]. - Overseas Institutions: The bond custody volume changed from an increase of 9.54 billion yuan in the previous month to a decrease of 9.63 billion yuan. They sold CDs, policy financial bonds, and commercial bank bonds and significantly reduced their purchases of treasury bonds. Relative to the stock, they reduced their allocation of bonds [23]. - Other Institutions: The decline in bond custody volume narrowed from 74.29 billion yuan in the previous month to 19.27 billion yuan. They reduced their sales of local bonds and treasury bonds, but sold policy financial bonds and reduced their purchases of CDs. The narrowing of the decline was mainly due to the decrease in the net reverse repurchase volume of the central bank [25]. - Commercial Banks: The bond custody increment increased by 90.74 billion yuan to 167.8 billion yuan, reaching a new high since July 2022. They increased their purchases of treasury bonds to a record high, switched to buying policy financial bonds, and reduced their sales of CDs. However, the custody increment of local bonds decreased significantly due to the narrowing of the net reverse repurchase volume. Relative to the stock, they increased their allocation of bonds, mainly interest rate bonds [28]. - Credit Unions: The bond custody increment increased by 539 million yuan to 544 million yuan. They switched to buying treasury bonds and policy financial bonds, but slightly reduced their purchases of local bonds, CDs, and financial bonds on the Shanghai Clearing House. Relative to the stock, they increased their allocation of bonds, mainly treasury bonds and local bonds [32][35]. 3. Non-bank Leverage Ratio Declined Again in May and Remained Near a Three-year Low - The bond market leverage ratio in May was about 107.1%, basically the same as in April and still significantly lower than before January this year. The leverage ratio of commercial banks increased by 0.2 percentage points to 103.3%, but was still lower than before 2025. The leverage ratio of non-bank institutions decreased by 0.4 percentage points to 116.4% and remained near a three-year low [37]. - Among non-bank institutions, the leverage ratio of securities companies decreased by 6.7 percentage points to 207.4%, and that of insurance and non-legal person products decreased by 0.2 percentage points to 113.2%, both remaining near recent lows. In the general funds, the repurchase balance of money market funds increased significantly, while that of non-money products of fund companies increased limitedly, and their absolute levels were still low. The repurchase balances of insurance companies and other products slightly declined from high levels, and that of wealth management products continued to decline slightly near a historical low [37].