Group 1 - The new tax policy allows individual investors to enjoy tax exemptions on interest income from government bonds, local government bonds, and financial bonds, provided their monthly interest does not exceed 100,000 yuan, effective until December 31, 2027 [1][2] - The policy aims to unify the tax system and eliminate tax burden differences among various bonds, enhancing market pricing efficiency and potentially increasing the issuance rates of new bonds by 5-10 basis points [1][2] - The tax burden on institutional investors will lead to a decrease in after-tax returns, with self-operated portfolios experiencing a one-time drop of approximately 6% and asset management products declining by about 3% [1][2] Group 2 - The tax increase is expected to widen the yield spread between new and old bonds, with older bonds likely to trade at a premium due to the tax exemption, while new bonds will need to offer higher nominal rates [2][3] - Financial institutions may adjust their strategies, potentially reducing their holdings in high-weight interest rate bonds and increasing investments in tax-exempt local government bonds [2][3] - The policy is designed to balance the need for government revenue without significantly impacting market liquidity, as 95% of retail investors will still benefit from tax exemptions [2][3] Group 3 - The issuance costs for new bonds are projected to rise by 3-5 basis points, but this increase is considered manageable [3] - High-net-worth individuals and private equity funds are expected to be more affected by the tax changes, potentially leading them to split funds across multiple accounts or shift towards older bonds [3][4] - The overall impact on the bond market is anticipated to be moderate, with the long-term effects dependent on the continuation of tax exemptions after 2028 [3][4]