Group 1 - Chengdu Bank (601838) plans to issue its first tranche of perpetual bonds with a base size of 8 billion yuan in 2025, with book building scheduled for August 19 [1] - The issuer and the bonds have been rated AAA by China Chengxin International Credit Rating Co., Ltd [1] - CITIC Securities (601066) is acting as the lead underwriter for this bond issuance [1]

Core Viewpoint - The article discusses the recent regulatory changes in China's interbank bond market aimed at addressing issues related to low-price underwriting and market distortions, emphasizing the need for self-regulation and proper pricing mechanisms in bond issuance [3][5][12]. Group 1: Regulatory Changes - On July 30, the China Interbank Market Dealers Association issued a notification to strengthen self-regulation in the bond market, addressing issues like distorted pricing and non-market-based issuance [3][5]. - The notification requires lead underwriters to establish internal management systems for pricing and prohibits bidding below cost for bond projects [6][12]. - The notification also emphasizes market-based pricing principles and the need for fair treatment of all investors during bond issuance [14][15]. Group 2: Low-Price Underwriting Issues - There has been a growing trend of low-price underwriting in the bond market, driven by underwriters' pursuit of scale and market share, particularly in the context of declining issuance rates and fees [3][8]. - A recent case involving Guangfa Bank's issuance of 350 billion yuan in subordinated debt highlighted the issue, with winning underwriters charging as low as 700 yuan, raising concerns about covering basic costs [7][9]. - The article notes that this is not an isolated incident, as similar low-price underwriting practices have been observed in other financial institutions, indicating a broader trend in the market [10]. Group 3: Self-Regulation and Monitoring - The notification outlines measures for monitoring and evaluating bond issuance practices, with the association set to impose self-regulatory measures on violators [15]. - It also encourages complaints and reports regarding violations of laws and self-regulatory rules, aiming to enhance transparency and accountability in the bond issuance process [15].

Core Viewpoint - Luzhou Bank's planned non-public issuance of H-shares amounting to HKD 18.32 billion has been postponed due to shareholder feedback, with the board deciding not to present the related proposal at the upcoming annual general meeting [2][3] Group 1: Issuance Details - The bank's board had previously approved a proposal to issue up to 1 billion new H-shares, which would represent approximately 36.79% of the existing issued share capital and 132.78% of the existing H-shares [3] - The net proceeds from the issuance were intended to supplement the bank's core tier one capital [3] Group 2: Current Financial Status - Luzhou Bank's operational status remains normal, and the postponement of the issuance will not adversely affect its daily operations or overall shareholder interests [3] - As of the end of 2024, the bank's core tier one capital adequacy ratio was reported at 8.27%, which is below the national average of 11.00% for commercial banks [5] Group 3: Market Conditions and Challenges - The planned issuance is categorized as a "broken net asset issuance," as the bank is currently trading below its net asset value [4] - The expected issuance price is set to be no less than HKD 1.85 per share, which is approximately 50% of the bank's net asset value [4] - Analysts have noted that low-priced issuances can dilute net asset value and harm existing shareholders' interests, making it challenging for banks, particularly those with state-owned shareholders, to set issuance prices below net asset value [5]

Core Viewpoint - Luzhou Bank has decided to postpone the submission of its non-public H-share issuance proposal to the shareholders' meeting, which was originally planned to raise at least HKD 1.85 billion by issuing up to 1 billion new H-shares at a minimum price of HKD 1.85 per share [1][2] Group 1: Shareholder Feedback and Decision - The decision to postpone was influenced by shareholder feedback regarding the non-public issuance proposal, leading the board to reconsider the plan [2][3] - The withdrawn proposals included several special resolutions for the annual shareholders' meeting and the first meetings of domestic and H-share shareholders, resulting in the cancellation of these meetings [2] Group 2: Governance and Future Plans - This situation highlights the importance of shareholder influence in major corporate decisions and reflects the company's governance standards [3] - The postponement is intended to allow management time to adjust the non-public issuance plan based on shareholder concerns, ensuring that future capital plans meet regulatory requirements and stakeholder interests [3] Group 3: Capital Needs and Market Position - Luzhou Bank, a state-owned enterprise, has a total share capital of approximately 2.718 billion shares, with major shareholders including Luzhou Laojiao Group and Sichuan Jiale Enterprise Group [4] - As of the end of 2024, the bank's core Tier 1 capital adequacy ratio was 8.27%, below the national average of 11.00%, indicating a continued need for capital supplementation [4] - The bank has been growing its asset base, reaching RMB 171 billion by the end of 2024, which represents an 8.48% increase from the previous year [4] Group 4: Future Capital Plans - The original plan to issue H-shares aimed to leverage the Hong Kong capital market for financing to enhance core Tier 1 capital and competitive strength [5] - Despite the postponement, the ongoing growth in asset size and relatively low capital adequacy ratio suggest that the need for capital supplementation remains significant [5] - Future capital plans, including potential "broken net issuance" or other strategies, may be revisited when market conditions and shareholder feedback align favorably [5]

Group 1: Open Market Operations - The central bank conducted a 7-day reverse repurchase operation on June 24, with a fixed rate and a total amount of 406.5 billion yuan, at an interest rate of 1.40% [2] - The total amount of reverse repos maturing on the same day was 197.3 billion yuan, resulting in a net injection of 209.2 billion yuan [2] Group 2: Funding Conditions - The latest overnight financing rate in the U.S. is 4.29% [4] - The overall funding conditions are balanced, with overnight pledged repo rates for deposit institutions slightly rising but remaining around 1.37% [6] Group 3: Interbank Certificates of Deposit - The latest transaction rate for one-year interbank certificates of deposit among major banks is approximately 1.65%, showing little change from the previous day [8] Group 4: Government Bond Futures - The closing prices for government bond futures show a decline: 30-year main contract down 0.27%, 10-year down 0.11%, 5-year down 0.07%, and 2-year down 0.02% [12] Group 5: Key News - The 16th meeting of the 14th National People's Congress Standing Committee discussed amendments to the Anti-Unfair Competition Law, including provisions for fair competition review and regulations against data rights infringement [13] - Germany's cabinet approved a budget for 2025 that includes significant new borrowing for military funding, with net new debt projected to reach 82 billion euros this year and gradually increase to over 126 billion euros by 2029, totaling around 500 billion euros in new borrowing over five years [15] Group 6: Bond Market Events - Minsheng Bank issued 30 billion yuan of perpetual capital bonds [17] - Vanke A exercised the redemption option for its "22 Vanke 05" corporate bonds [17] - Guangfa Securities received approval for its corporate bond issuance registration from the CSRC [17] - Yunnan Copper's medium-term notes and short-term financing bonds are registered for 5 billion yuan each [17] Group 7: Negative Events in Bond Market - Several entities, including Guizhou Water City Economic Development Zone and Hubei Meitong Pharmaceutical Co., have faced negative rating events, such as being placed under rating observation or having their ratings downgraded [18]

Core Viewpoint - Recent actions by several small and medium-sized banks to supplement capital indicate a new wave of financing efforts, primarily through the issuance of perpetual bonds and secondary capital bonds, as well as capital increases and targeted placements [1][2]. Group 1: Capital Supplementation Actions - Lanzhou Bank and Xi'an Bank have received regulatory approval to issue perpetual capital bonds for the first time since their listings, with Lanzhou Bank allowed to issue up to 5 billion RMB and Xi'an Bank up to 7 billion RMB [2]. - The issuance of "perpetual bonds" by commercial banks has accelerated, with 47 bonds issued in 2023, totaling 794.96 billion RMB, showing a slight increase compared to the same period last year [2]. Group 2: Reasons for Accelerated Issuance - The capital adequacy ratios of small and medium-sized banks are generally lower than those of large banks, with some experiencing a downward trend, necessitating capital supplementation to meet operational needs [3]. - The profitability pressures faced by some banks limit their ability to supplement capital internally, leading them to turn to external channels such as bond issuance [3]. Group 3: Capital Increase and Share Issuance - In response to ongoing capital pressure, small and medium-sized banks are accelerating capital increases through share issuance or targeted fundraising [4]. - Regulatory approvals have been granted for several banks, including Zhuhai Rural Commercial Bank and Zhangjiakou Bank, to increase their registered capital [4]. Group 4: Capital Adequacy Ratios - As of the first quarter of 2025, the capital adequacy ratio for commercial banks (excluding foreign bank branches) was 15.28%, with city commercial banks and rural commercial banks at 12.44% and 12.96%, respectively, significantly lower than large commercial banks at 17.79% [5]. - The banking sector is facing challenges such as declining net interest margins and rising asset quality pressures, which impact profitability and internal capital supplementation capabilities [5].

Group 1: Open Market Operations - The central bank announced a 203.5 billion yuan 7-day reverse repurchase operation on June 19, with a fixed interest rate of 1.40%, and the full bid amount was accepted [1] - On the same day, 119.3 billion yuan of reverse repos matured, resulting in a net injection of 84.2 billion yuan [1] Group 2: Funding Conditions - The funding environment appears slightly tighter, with the central bank shifting to net injections; the overnight pledged repo rate has slightly increased to around 1.37%, while the 7-day pledged repo rate rose by nearly 2 basis points [3] - The latest overnight financing guarantee rate in the U.S. is reported at 4.31% [5] Group 3: Interbank Certificates of Deposit - The latest transaction rate for one-year interbank certificates of deposit among major banks is approximately 1.64%, showing a slight decrease from the previous day [7] Group 4: Bond Market - The closing prices for government bond futures showed a 0.16% increase for the 30-year main contract, while the 10-year main contract remained unchanged; the 5-year and 2-year main contracts saw slight declines of 0.02% and 0.01%, respectively [11] Group 5: Bond Issuance - Poly Development has received approval to register a 5 billion yuan short-term financing bond [16] - Guotai Junan has been granted approval to issue 15 billion yuan in corporate bonds for technological innovation [16] - Lanzhou Bank has been approved to issue up to 5 billion yuan in perpetual capital bonds [16] - The Export-Import Bank of China issued 10 billion yuan in bonds to support Shanghai's foreign trade and development [16]

Core Viewpoint - Postal Savings Bank of China (PSBC) has successfully completed a significant capital increase through a private placement, marking the first large-scale state investment in the bank, with the Ministry of Finance becoming its third-largest shareholder [3][4][5]. Group 1: Capital Increase Details - PSBC raised 130 billion yuan through a private placement, with the Ministry of Finance contributing 117.58 billion yuan, China Mobile Group 7.854 billion yuan, and China Shipbuilding Group 4.566 billion yuan [3][4]. - The capital raised will be used to enhance the bank's core tier one capital, expected to increase the capital adequacy ratio by 1.5 percentage points [5]. - The final issuance price was set at 6.21 yuan per share, representing a premium of approximately 14.36% over the closing price prior to the announcement [5][6]. Group 2: Broader Banking Sector Context - The issuance of perpetual bonds (二永债) has accelerated in the banking sector, with total issuance nearing 800 billion yuan this year, close to last year's figures [8][9]. - Major banks are expected to face a contraction in the supply of perpetual bonds due to the completion of capital injections and the issuance of TLAC bonds, while smaller banks will continue to experience pressure to issue [9][10]. - The average dividend yield for PSBC is approximately 4.74%, which is higher than that of other major banks, indicating a relatively strong return for investors [6][10].

Group 1 - Postal Savings Bank of China (PSBC) has completed a targeted issuance of 130 billion yuan, marking its first large-scale state capital injection, with the Ministry of Finance becoming the third-largest shareholder at 15.77% [2][3] - The issuance involved approximately 20.93 billion shares, with the Ministry of Finance contributing 117.58 billion yuan, China Mobile Group 7.85 billion yuan, and China Shipbuilding Group 4.57 billion yuan [2] - The capital raised will be used to supplement core Tier 1 capital, expected to increase PSBC's capital adequacy ratio by 1.5 percentage points, enhancing its capital strength and risk resistance [3][4] Group 2 - The issuance of perpetual bonds (二永债) has accelerated, with banks issuing nearly 800 billion yuan this year, approaching last year's total of 785.6 billion yuan [5][6] - Agricultural Bank of China issued 60 billion yuan in perpetual bonds, with a 10-year fixed rate bond at 1.93% and a 15-year bond at 2.10% [5] - The overall issuance of perpetual bonds in the banking sector is expected to be driven by smaller banks, as larger banks' capital pressures ease following state capital injections [6][7] Group 3 - The Ministry of Finance's recent issuance of special government bonds totaling 500 billion yuan aims to support state-owned commercial banks in capital replenishment [3][4] - The average dividend yield for PSBC is approximately 4.74%, higher than the median yield of 4.2% for 42 listed banks [4] - The trend of early redemption of perpetual bonds is expected to continue, driven by lower issuance costs and the need for banks to maintain refinancing capabilities [7]

Open Market Operations - The central bank announced a reverse repurchase operation of 156.3 billion yuan for 7 days at an interest rate of 1.40% on June 18, with 164 billion yuan of reverse repos maturing on the same day, resulting in a net withdrawal of 7.7 billion yuan [1]. Funding Conditions - The impact of the tax period is nearing its end, leading to a stable funding environment. The overnight pledged repo rate for deposit-taking institutions slightly decreased to around 1.37%, while the 7-day pledged repo rate saw a slight increase. In the overseas market, the latest overnight financing rate in the US is 4.32% [3]. Interbank Certificates of Deposit - The latest transaction rate for one-year interbank certificates of deposit among major banks is around 1.65%, showing little change from the previous day [6]. Government Bond Futures - The closing prices for government bond futures are as follows: the 30-year main contract increased by 0.09%, the 10-year main contract decreased by 0.01%, the 5-year main contract decreased by 0.01%, and the 2-year main contract increased by 0.01% [10]. Key Financial Policies - The People's Bank of China announced eight significant financial opening measures at the 2025 Lujiazui Forum, including the establishment of a trading report database for the interbank market and a digital RMB international operation center, among others [11]. - The Chairman of the China Securities Regulatory Commission emphasized enhancing the inclusiveness and adaptability of the system, focusing on deepening reforms in the Sci-Tech Innovation Board and the Growth Enterprise Market [11]. Bond Market Events - The 2025 Lujiazui Forum opened with announcements of major financial policies, including the development of Sci-Tech bonds and the acceleration of the launch of Sci-Tech bond ETFs [15]. - Recent negative events in the bond market include downgrades in ratings for several companies, indicating potential risks in the non-standard assets of local government financing vehicles [16].