Home Business The issuance of local government bonds in 2022 kicks off trillions of yuan to aid infrastructure funds on the road

The issuance of local government bonds in 2022 kicks off trillions of yuan to aid infrastructure funds on the road

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Original title: In 2022, local government bond issuance will start, with trillions of yuan rushing to aid infrastructure funds on the road. Source: China Securities Journal

The Henan Provincial Department of Finance recently disclosed that it will bid for the issuance of 2022 Henan Provincial Government Special Bonds (Issues 1 to 9) on January 13, kicking off the issuance of local government bonds in 2022. Experts predict that there will be trillions of yuan in local government bond issuance in 2022, of which the scale of special bonds is expected to be the same as last year or slightly increase, and the pace of issuance will be more advanced than in 2021, which will better support the growth of infrastructure investment.

Issuance scale in the first quarter is expected to reach trillions

Information disclosed by Henan on January 7 showed that the first batch of nine local bonds were all newly-added special bonds, with a total scale of 38.201 billion yuan, which were invested in urban and rural development, social undertakings, and shed reform. Among them, 17.987 billion yuan was invested in urban and rural development, 6.541 billion yuan was invested in social undertakings, and 13.673 billion yuan was invested in shed reform.

In addition to Henan, Hubei also disclosed on January 7 that it will issue 2022 Hubei Provincial Government General Bonds (1 to 3 tranches) on January 14, all of which are new bonds. Among them, the planned issuance of 5.52 billion yuan for the 2-year period, 7.36 billion yuan for the 7-year plan, 5.52 billion yuan for the 15-year plan, and the total face value of the planned issuance of 18.4 billion yuan.

In addition, many places (including provinces, autonomous regions, municipalities directly under the Central Government, and cities under separate state planning) also disclosed plans for local bond issuance in the first quarter, many of which disclosed that new bonds will be issued in January.

As of January 7 (no disclosure on January 8 and 9), the information disclosed by various localities on China Bond Information Network shows that Zhejiang, Shanxi, Shaanxi, Shandong, Jiangxi, Jiangsu, Hebei, Guizhou, Gansu, Fujian, Xiamen, Ningbo, Dalian and other places have announced plans for local government bond issuance in the first quarter. Among them, Xiamen clearly plans to issue the first batch of new local bonds from January 9 to January 15. As of press time, the specific issuance date has not yet been announced. With the exception of Ningbo, Guizhou, and Gansu, the above-mentioned regions all plan to issue local bonds in January.

according toZhongtai SecuritiesAccording to Zhou Yue, the chief fixed-income analyst, as of January 7, the total amount of local government bonds that will be issued from January to March is 862.4 billion yuan. Among them, it plans to issue 282 billion yuan in January, 314.7 billion yuan in February, and 265.7 billion yuan in March.

Yang Yewei, chief fixed-income analyst at Guosheng Securities, said that from the perspective of the regions that have announced the issuance plan, it is estimated that the scale of local bond issuance in the first quarter of 2022 will be around 1 trillion yuan.

Advance the rhythm to support early development of infrastructure

Local government special bonds are an important source of funds for local construction projects and play an important role in expanding effective investment. Compared with 2021, the time for the issuance of new special bonds in 2022 has been advanced, and the start of the issuance of new special bonds in 2021 is March.

The Ministry of Finance has previously stated that it will continue to strengthen supervision and promote the issuance and use of the quota issued in advance in the first quarter of 2022, which will provide strong support for stabilizing the macroeconomic market.

  CITIC SecuritiesChief economist Zhu Jianfang said that the amount of special debt reached 1.46 trillion yuan in advance, and it does not rule out that there will be a second batch of “advance approval” issued. Combining the amount of special debt investment from November to December 2021, it is estimated that a trillion yuan worth of special debt funds will be spent in the first quarter of 2022. It is expected that infrastructure investment in the first quarter will achieve a single-digit growth of about 7%, and the annual growth rate of infrastructure construction in 2022 will have a brilliant performance of about 6.5%.

Regarding the areas where special debt is invested, Yewei Yang believes that the proportion of special debt funds invested in infrastructure will increase, increasing support for key projects in the 14th Five-Year Plan period and the construction of affordable housing. Under the pressure of steady growth, the proportion of special bonds invested in infrastructure is expected to rise slightly, including urban and rural cold chain logistics, municipal and park construction, and major projects included in the “14th Five-Year Plan”. It is estimated that the funds invested by local government bonds in infrastructure in 2022 will increase by about 352.5 billion yuan compared with 2021, which will directly drive the growth of infrastructure investment by about 1.9 percentage points.

Looking at the whole year,GF SecuritiesSenior macro analyst Wu Qiying predicts that in terms of the scale of local bonds in 2022, new general bonds may be issued about 1 trillion yuan, and new special bonds may be issued about 3.7 trillion yuan, slightly exceeding the 3.65 trillion yuan in 2021. The pace of local government bond issuance is significantly ahead of 2021. In this context, the pace of infrastructure investment is expected to be relatively advanced, and the high opening of fixed asset investment at the beginning of the year will be more secure for the steady economic growth throughout the year.

Massive information, accurate interpretation, all in Sina Finance APP

Editor in charge: Li Siyang

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