Credit Weekly: Third Batch of Amortized-Cost Bond Funds Newly Filed, Watch for Structural Opportunities
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Huachuang's credit weekly reports that credit bond yields traded in a narrow range with diverging spread moves. Escalated growth-stabilization policies in late September triggered institutional profit-taking, and the post-holiday market recovered as policy expectations were digested and liquidity loosened. Amortized-cost bond fund issuance keeps expanding: a third batch of 16 products was newly filed on October 8-9, which, together with quarter-start wealth-management inflows, underpins credit demand. Credit spreads now sit near lows since 2024, so the report recommends short-end defensive holdings as portfolio ballast while watching structural opportunities, and cautions that institutional accumulation of banks' perpetual and secondary capital bonds has weakened, leaving near-term profit-taking pressure. The Ministry of Finance has arranged the use of RMB550bn in carried-over local government debt limits. With central-bank bond purchases underpinning sentiment, bond market mood should remain stable; key watch items are the pace of growth-stabilization policies and shifts in equity risk appetite. No specific recommendations were given.
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