Institutional looming game mentality 1-year central vote rate higher than market expectations

July 9 (Thursday), the People's Bank of China in the open market operation issued 50 billion yuan March central votes and 50 billion yuan 1-year vote. Since the 1-year central vote for the first issue after 7 months, the 9th Open market operation has attracted the attention of all parties. The final issue rate of the 1-year central vote is much higher than the market expectation.　　Analysts said that, as a result of the near-stage market new shares are in full swing, funding has been tight, institutions for the 1-year central vote of the restart, a delicate mentality. The interest rate is far higher than the market is expected to be due to the resumption of the 1-year vote, the central bank 9th for the first time in 7 months, "two-issue" issue. The day's operation showed that the central bank issued 1-year and 3-month-old RMB 50 billion yuan, 1-year and 3-month-period votes won the winning rate of 1.5022% and 1.0456% respectively.　　With regard to the issue of the two-issue interest rate, analysts said that the March central vote rate than last week's small rise is reasonable, but the 1-year central vote rate is the "Highland Landing." The central bank's March-year interest rate, released last week, has been broken by the tight market capital. The March central coupon rate, which has been stable at 0.965% per cent since January 9, 2009 to the end of June, rose to 1.0279% per cent last week as interest rates in interbank markets climbed. Yesterday's March issue of the central vote rate again up to 1.0456%, also fully within the market expectations. However, the 1-year central vote was largely unexpected. After the central bank announced the resumption of the 1-year vote on 8th, a number of institutions have been predicting the current issue. Since the 1-year central vote was the first to be issued since November 18, 2008, the 2.2495% interest rate was clearly meaningless.　　Mainstream institutional views generally believe that the current 1-year central vote rate will be awarded in the vicinity of 1.4%, and the actual 1.5022% interest rate level, is much higher than the market expectations. Institutional looming game mentality for the 9th issue of the 1-year central vote, analysts said that the increase in the size of the issue, as well as the agency's low income investment in the market will not be strong, the common cause of the central vote interest rate higher than expected. Compared with the current weighted average interest rate of about 1.22% of the 7-day pledge repo in the interbank market, and the 1-year Shanghai interbank rate (Shibor) 1.88% interest rates, whether the March or 1-year central votes, in the current market conditions, the interest rate is certainly somewhat too low. A commercial bank trader said the central bank's announcement that it would restart the 1-year Chengdu was "unacceptable" when it restarted the launch of a new IPO, especially at the high speed of the IPO, although 1.53 trillion of credit data in June was too high. The market person also said that the central bank to restart the 1-year issue, "It is best to consider the issue of the rate of interest rates," so as to give the market a more specific's expectations. For the 1-year central vote rate, Liu Jianyan, the first venture Securities analyst, said it would stabilize the open market interest rate on a new platform this time. The March central vote rate is expected to stabilise at around 1.1%-1.2%, while the 1-year rate is expected to reach a new platform for around two weeks. According to statistics from wind, the open market this week, the opening of the ticket and is repurchase 260 billion yuan, an increase of 98.5 billion yuan last week. If the central bank no longer carries out other operations this week, it will have a net return of 10 billion yuan through the open market, while the central bank last week made a net investment of 31.5 billion yuan through the open market.