As interest rates rose at the end of the month, exchange buy-backs attracted the attention of a number of investors, ranging from institutional investors to bulk-to-market companies, to this type of investment characterized as “low-risk, high-yield”。
For example, if the above-mentioned bond was repurchased at a maximum interest rate of 8. 32 per cent on 27 september and the government debt of $100,000 for a seven-day period was repurchased at gc007, it would yield a return of $268. 53 on 10 october after deduction of fees。
Before the festival
An industry with long-standing responsibility for private fund-raising management revealed to first-hand financial reporters that, in managing products, attention was paid to the prices of reverse purchases on a daily basis, particularly at generally higher interest rates at the end of the season and at the end of the month. On 27 january, the top 9 per cent of the r-001 repurchases of the country's debt were paid back in reverse。
“the upcoming national day holidays have also made the return on investment at the end of the month in reverse purchases more attractive than usual.” the above-mentioned private fundraiser also forwarded to the first financial journalist the forms obtained from the seaton securities office, which calculates the number of interest days, the availability of funds and the desirable date for participation in reverse purchases before the festival。
According to the first financial reporter, for example, if the above-mentioned government debt was repurchased at a maximum interest rate of 8. 32 per cent on 27 september, if it was repurchased in gc007 for a 7-day period of $100,000, the actual interest-bearing days would be 12 days, and the return on 10 october would be as high as 268. 53 after deduction of fees. And even if the investor did not make the deal at the highest point in the day and bought it at a weighted average price of 7. 257 per cent on the day, the return would be $233。
If the same principal is held in the balance, it is assumed that the return would be 4 per cent and that interest would be earned after 12 days at $131. 5, which is significantly lower than the exchange's return. In fact, the seven-day annualized rate of return on the balance was declining gradually, having fallen by 4 per cent on 17 september and by 3. 92 per cent on 26 september。
A chinese-chinese securities employee also recommended the repurchase of the national debt to his client: “incoming, the national holiday bonus offers a seven-day repurchase of the national debt, with 12 days of interest under the new scheme.” it is noteworthy that on 27 and 28 september (on wednesday) various varieties were purchased for more than one day and that the actual interest-bearing days were over 10 days。
According to journalists, the number of interest days has been changed from nominal to actual, following the simultaneous launch of the new interest-bearing rule by the deepest exchange in may. In other words, if the holiday is extended until the expiry of the holiday, the interest-bearing days are based on the number of days actually taken。
Why is it so popular to repurchase the national debt
The first financial reporter found that not only the institutions and the diaspora, but also some listed companies had a unique interest in repurchases of national debt, in which investment at the end of the month and the end of the season was particularly visible。
In the case of the milliche industry (603027. Sh), according to information publicly disclosed on the exchange, two consecutive trading days at the end of august resulted in an annualized return of over 6 per cent。
The so-called exchange buy-backs are divided into pledge buy-backs of bonds deposited in the country and bond buy-backs of deep deposits. The first purchase was for $100,000, while the second purchase was for $1,000。
According to the presentation, exchange bond pledge buy-backs can serve as a tool for short-term financial management by social and public investors. Social and public investors, such as individuals, can borrow temporarily idle funds through the exchange buy-back market to earn a certain amount of revenue as it matures. The time of acceptance of an agreement repurchase declaration by the deep exchange is from 9:30 to 11:30 and from 15:00 to 15:00 per transaction date。
Journalists have learned that the exchange is more secure because its counter-buying counterpart is a clearing house. In the form of a requisition, it is only necessary to open a counter-purchase business on the old securities account and to select and confirm the transaction after entering the variety code to be operated。
In addition, transaction costs for counter-purchase transactions on exchanges are not high for the bulk. The two cities are in line with the schedule rates for reverse buy-back products, namely, zero,001 per cent for one day, zero,002 per cent for two days, zero,003 per cent for three days, zero,004 per cent for four days, zero,005 per cent for seven days, zero,01 per cent for 14 days, zero,02 per cent for 28 days and zero,03 per cent for more than 28 days。
In the case of repurchases of the above-mentioned national debt, assuming the principal amount of $100,000, the final return on investment of the two-day, three-day, four-day, seven-day and 14-day varieties, calculated at weighted average interest rates, is over $200。
