Report Industry Investment Rating No relevant content provided. Core Viewpoints - The "History of Overseas Central Bank Bond Purchases" series systematically analyzes key stages of bond - purchase policies of the Bank of Japan, the Federal Reserve, and the European Central Bank. Their policies have similarities and differences in approach, implementation timing, and scale [1]. - The Bank of Japan and the Federal Reserve's bond - purchase policies evolved from traditional to innovative tools. The Bank of Japan was a pioneer in unconventional monetary policies, starting quantitative easing in 2001. The Federal Reserve launched quantitative easing in 2008. The ECB was more cautious about unconventional policies and started full - scale quantitative easing in 2015 [1]. - The bond - purchase policies of the Federal Reserve, ECB, and the Bank of Japan have been complex. The Federal Reserve ended QE in 2014, then had a slow balance - sheet reduction (QT), which was halted early in 2019. It restarted QE in 2022 due to the pandemic and then QT due to high inflation. The ECB stopped APP net purchases in 2018, restarted in 2019, and ended bond - buying in 2022 and started passive QT in 2023. The Bank of Japan ended negative interest rates and started balance - sheet reduction in March 2024. The Bank of Japan's exit was more cautious and delayed, the Federal Reserve's policy cycle was more flexible, and the ECB's policy shift was more sluggish [2]. - The bond - purchase scales of the three central banks are huge. As of August 20, 2025, the Bank of Japan's scale was 574.8 trillion yen, the Federal Reserve's was $6.5 trillion, and the ECB's was 4.2 trillion euros, accounting for 79.5%, 98.6%, and 69.2% of their total assets respectively. Relative to economic aggregates, the Bank of Japan's balance - sheet expansion was more significant [3]. - The Federal Reserve and the ECB have a wider range of bond - purchase categories. The Federal Reserve mainly buys MBS and Treasury bonds. The ECB's bond - purchase scope includes government bonds, covered bonds, asset - backed securities, and corporate bonds. The Bank of Japan, besides buying Treasury bonds, also buys a large amount of stock ETFs and J - REITs [3]. - The Bank of Japan's YCC policy directly sets an interest - rate ceiling, marking a new stage in monetary policy by shifting from controlling bond - purchase quantity to controlling bond interest rates [3]. Summary by Relevant Catalog First Stage (2009 - 2010): First Attempt during the Sub - prime Crisis - **Macro Background and Bond - purchase Policy Goals**: Provide liquidity to the bond market. After the 2008 financial crisis, the euro - area banking system faced a liquidity crisis, especially in the covered - bond market [14][15]. - **Bond - purchase Method**: Continuously make small - scale purchases in the primary and secondary markets. In May 2009, the ECB announced the CBPP, buying 600 billion euros of covered bonds from July 2009 to June 30, 2010, with a maximum holding of 611.4 billion euros [16]. - **Bond - market Impact Analysis**: The CBPP had a certain boosting effect on the covered - bond market, reducing the yield and spread of bank - issued covered bonds and enhancing bank financing ability. However, due to its limited scale, its impact on the overall bond market and economy was relatively mild [17]. Second Stage (2010 - 2012): Emergency Response during the European Debt Crisis - **Macro Background and Bond - purchase Policy Goals**: Provide liquidity to the bond market. After the Greek debt crisis, market panic spread to peripheral countries, causing a sell - off of their sovereign bonds and a surge in yields. The ECB launched the "Securities Markets Programme" (SMP) to address market liquidity and financing difficulties [22]. - **Bond - purchase Method**: Buy sovereign bonds of troubled countries in the secondary market. The SMP aimed to buy public and private - sector bonds in the secondary market without disclosing the quantity, time frame, or target level. It initially focused on Greece, Ireland, and Portugal, then expanded to Italy and Spain. The ECB also sterilized the injected liquidity. In 2011, SMP was restarted and expanded. The SMP's total reached a maximum of 2,195 billion euros by March 5, 2012. In 2011, the ECB launched CBPP2 with a planned scale of 400 billion euros but only bought 164 billion euros. In 2012, the "Outright Monetary Transactions" (OMT) plan was introduced but never activated [23][24]. - **Bond - market Impact Analysis**: The SMP had an immediate positive impact on the bond market, reducing the yields of Spanish and Italian bonds. The OMT had an "announcement effect", significantly reducing the yields of Spanish and Italian bonds. However, as the economic recovery was weak, the effectiveness of the SMP decreased [25]. Third Stage (2013 - 2018): Full - scale Quantitative Easing under Persistent Low Inflation - **Macro Background and Bond - purchase Policy Goals**: Implement QE in the euro area. After the European debt crisis, the euro - area economy recovered slowly, with low inflation and high financing costs. The ECB introduced negative interest rates and launched multiple bond - purchase programs [31]. - **Bond - purchase Method**: Use a combination of measures. In 2014, the ECB announced CBPP3 and the Asset - Backed Securities Purchase Program (ABSPP). CBPP3 bought covered bonds, with a holding of 2,702 billion euros by the end of 2018. ABSPP bought asset - backed securities, with a holding of 276 billion euros by the end of 2018. In 2015, the Expanded Asset Purchase Programme (APP) was launched, including the Public Sector Purchase Programme (PSPP) and the Corporate Sector Purchase Programme (CSPP). The APP ended net purchases in December 2018, with a cumulative net purchase of about 2.65 trillion euros [32][33][35]. - **Bond - market Impact Analysis**: The ECB's large - scale bond purchases led to a significant decline in long - term government bond yields in the euro area. The yields of German 10 - year government bonds fell into negative territory in 2016, and the yields of French bonds also dropped close to zero. The spread between peripheral and core countries generally narrowed [39]. Fourth Stage (2019 - 2023): Emergency Bond - purchase Plan during the Pandemic - **Macro Background and Bond - purchase Policy Goals**: Intervene promptly to maintain financial stability. In 2019, due to economic slowdown and low inflation, the ECB restarted QE. In 2020, the "Pandemic Emergency Purchase Programme" (PEPP) was launched to deal with the impact of the COVID - 19 pandemic [42]. - **Bond - purchase Method**: Systematically increase purchases. In September 2019, the ECB restarted QE with a monthly purchase of 200 billion euros. In March 2020, an additional 1,200 billion euros of purchases were announced. The PEPP was launched in March 2020 with an initial scale of 7,500 billion euros, which was later expanded to 1.85 trillion euros. The PEPP ended net purchases in March 2022, with a cumulative purchase of about 1.71 trillion euros [43][45]. - **Bond - market Impact Analysis**: The PEPP effectively alleviated market panic, stabilized investor confidence, and reduced excessive market volatility. During the implementation and scale - expansion of the PEPP, the 10 - year bond yields in Europe generally declined. When the purchase speed slowed down, bond yields generally rose [52]. Summary and Insights from Overseas Central Bank Bond Purchases - Similarities and differences exist among the bond - purchase policies of the Bank of Japan, the Federal Reserve, and the ECB in terms of approach, implementation timing, and scale, as detailed in the core viewpoints above [53].

Group 1 - The core viewpoint indicates that despite renewed focus on U.S. tariffs, there is insufficient reason to significantly adjust the baseline scenario probabilities, maintaining a "soft landing" outlook for the economy [1] - The probability of an "economic soft landing" remains high due to the resilience of the U.S. labor market, while the probability of an "economic hard landing" is adjusted down to 10% [1] - The U.S. labor market continues to show stability, with corporate profitability not being challenged, leading to expectations that unemployment rates will not rise significantly [1] Group 2 - The Eurozone economy is showing signs of stabilization and improvement, particularly with Germany's recovery being the most notable, suggesting a clearer path for Eurozone economic recovery [2] - The UK economy remains weak, with growth expected to be particularly sluggish in Q2 2025, but it is approaching a turning point for a potential rebound due to improving credit conditions [2] - The company maintains a cautious stance on long-duration bonds due to the lack of political will to address long-term national debt issues, increasing the risks associated with these bonds [2] Group 3 - The company has upgraded the rating for covered bonds, which are backed by high-quality loans, as their attractiveness increases relative to other European market bonds [3] - The outlook for various credit assets has been generally downgraded based on valuation considerations, as credit spreads are at historically low levels, reducing overall valuation appeal [3] - High-quality short-term bonds continue to provide the most attractive value, with a sustained preference for this asset class [3]

Group 1 - The core view of the company is that the current economic scenario is still leaning towards a "soft landing," with only a slight increase in the probability of a "no landing" scenario to 25% and a decrease in the "hard landing" scenario to 10% [1] - The resilience of the U.S. labor market continues to support the "soft landing" scenario, with stable job growth and corporate profitability not being challenged [1][2] - The company observes signs of recovery in the Eurozone, particularly in Germany, indicating a clearer path for economic recovery despite the lack of synchronized growth across the region [3] Group 2 - The U.K. economy remains weak, with growth expected to be particularly sluggish in Q2 2025, but the company believes it is nearing a turning point for recovery due to improving credit conditions and stable real income [4] - The company expresses a cautious stance on long-duration bonds due to rising risks associated with long-term national debt, while favoring covered bonds and mortgage-backed securities for their attractive spreads and lower volatility [5] - In the credit market, the company has generally downgraded the outlook for various credit assets due to historically low credit spreads, although it maintains a preference for high-quality short-term bonds [5]

Core Insights - Coface reported a net income of €62 million in Q2-25, a decrease from the record Q2-24, amid rising global bankruptcies above pre-COVID levels [3][6] - The company continues to grow its revenues in credit insurance and services, driven by strategic investments [4][7] - The annualized return on tangible equity (RoATE) stands at 12.6% as of June 30, 2025 [26] Financial Performance - Total revenue for H1-25 reached €936.6 million, reflecting a 1.5% increase compared to H1-24 [10][11] - Insurance revenue increased by 0.8% to €760.0 million, while other revenues rose by 4.9% to €176.6 million [6][8] - The underwriting income net of reinsurance decreased by 21.2% to €153.6 million, and investment income fell by 35.4% to €26.3 million [6][25] Operational Metrics - The net loss ratio increased to 40.1%, up 5.1 percentage points year-on-year, while the net combined ratio rose to 71.3%, up 7.9 percentage points [7][19] - Client retention improved to 94.0%, with client activity up by 1.8% [7][11] - The company made two acquisitions in information services and launched a Lloyd's syndicate to enhance its offerings [5][32] Regional Performance - Revenue growth varied by region, with Latin America showing a significant increase of 17.5% at constant FX, while Central and Eastern Europe saw a decline of 3.8% [14][18] - Western Europe reported a 2.1% increase in turnover, driven by strong sales in services and credit insurance [15] - The Asia-Pacific region experienced a 10.5% increase in turnover, benefiting from high client retention and activity rebound [18] Strategic Developments - Coface is focusing on strengthening its credit insurance business and enhancing its data strategy through new appointments and acquisitions [7][32] - The company is navigating a challenging economic environment marked by rising tariffs and increased business failures in advanced economies [28][31] - Coface's solvency ratio remains robust at 195%, well above the target range of 155%-175% [27]

Group 1 - The company, New Town Development, is considering issuing guaranteed bonds domestically to raise funds between 1.5 billion to 2 billion RMB [1]