Caixin Global Bond Market Morning Briefing March 2 | Middle East Turmoil, International Oil Prices Surge Nearly 8% Today, How Will Various Asset Classes Perform? Dongwu Securities Plans to Acquire Donghai Securities

Bond Market News

【2026 National Two Sessions Begin This Week】

The 14th National People’s Congress (NPC) Fourth Session and the 14th Chinese People’s Political Consultative Conference (CPPCC) Fourth Session will open in Beijing on March 5 and March 4, respectively.

【Middle East Turmoil: How Will Major Asset Classes Perform? International Oil Prices Surge Nearly 8% Today】

On February 28, Beijing time, the US and Israel launched a joint military strike against Iran. On March 1, multiple Iranian media confirmed that Iran’s Supreme Leader Khamenei was assassinated on the 28th. Analysts believe that US and Israeli military actions against Iran will disrupt energy supply expectations, boost market risk aversion, and the evolving regional situation around the Strait of Hormuz will determine the market impact.

Regarding oil prices, HSBC oil and gas analyst Kim Fishelte believes that the security of shipping through the Strait of Hormuz will be the biggest variable influencing international oil prices. If there is a temporary disruption, prices could quickly spike to $80 per barrel. An analyst from U.S. Turtle Capital suggests that if conflicts in the Strait of Hormuz cause oil supply interruptions, prices could break $100 per barrel.

As of 7 p.m. Eastern Time (8 a.m. Beijing time Monday morning), US crude oil prices rose over 7.7% intraday, up $5.16 to $72.18 per barrel. The global benchmark Brent crude also increased by about 8%, up $5.91 to $78.78 per barrel.

On the international gold front, some analysts believe that given gold’s strong performance over the past six months, its safe-haven status has been widely accepted by the market. Most “panic trades” may already be reflected in current prices, so the marginal response of gold to US and Israeli strikes on Iran might be lower than expected. On March 2, gold and silver prices surged sharply at the open. Spot gold rose over 2%, trading at $5,387.49 per ounce. Spot silver also rose over 2%, at $95.792 per ounce.

In the bond market, Huaxi Fixed Income states that escalation of US-Iran conflict may be a short-term fluctuation in March. Historically, bond market reactions to conflicts have been mostly transmitted through stock market sentiment. This round of changes could be affected if rising crude oil prices push global inflation expectations higher. Additionally, the main theme for March bond market may still be policy implementation during the Two Sessions and the strength of Q1 economic recovery. If policy stimulus remains restrained and macroeconomic data for Q1 meet expectations, there could be new opportunities in mid-March. On March 2, interbank key interest rate bond yields mostly rose at the start of trading, with the 10-year national development bank bond yield rising 0.45 basis points to 1.9625%, the 30-year special national debt yield rising 0.75 basis points to 2.2425%, and the 10-year national development bond yield falling 0.25 basis points to 1.9275%. After the US-Iran tensions escalated last Saturday, interbank yields initially fell by 1-2 basis points.

【National Bureau of Statistics: 2025 Various Entities Raised CNY 16.3 Trillion via Shanghai, Shenzhen, and Beijing Exchanges】

On February 28, the National Bureau of Statistics released the “2025 National Economic and Social Development Statistical Bulletin.” In 2025, the total fundraising through Shanghai and Shenzhen stock exchanges’ A-shares was CNY 1.258 trillion, an increase of CNY 833.2 billion from the previous year. The exchanges saw 90 A-share IPOs, raising CNY 124.2 billion, up CNY 62 billion year-over-year, including 19 STAR Market stocks raising CNY 38.1 billion. A-share refinancing (including public offerings, private placements, rights issues, preferred shares, and convertible bond conversions) totaled CNY 1.1341 trillion, an increase of CNY 771.2 billion. Beijing Stock Exchange issued 26 stocks, raising CNY 760 million, with an additional CNY 400 million in refinancing. Overall, various entities raised CNY 16.3 trillion through bonds issued on Shanghai, Shenzhen, and Beijing exchanges (including corporate bonds, enterprise bonds, asset-backed securities, government bonds, and local government bonds). The exchanges listed 20 REITs in infrastructure, raising CNY 40.2 billion. By year-end, there were 5,960 companies listed on the National Equities Exchange and Quotations (NEEQ), with a total of CNY 7.4 billion raised through stock issuance.

【CSRC Releases “Private Equity Fund Information Disclosure Supervision Measures” Effective September 1, 2026】

On February 27, the China Securities Regulatory Commission (CSRC) issued the “Measures for the Supervision and Administration of Private Equity Fund Information Disclosure,” which will take effect on September 1, 2026.

The measures consist of seven chapters and 44 articles, mainly covering: general principles, information disclosure requirements, periodic and interim reports, liquidation reports, information disclosure management, supervision and legal responsibilities. They specify principles for private fund managers, custodians, and sales agencies to disclose information to investors, including content, channels, frequency, and scope. They prohibit false promises such as guaranteeing investment principal or minimum returns, and require timely disclosure of major events, liquidation notices, and related information. The measures also emphasize establishing sound internal controls for information disclosure, cooperation obligations of shareholders and controllers, and strengthening management of non-public information. The CSRC and its agencies are authorized to supervise and enforce compliance, including corrective orders, regulatory talks, warning letters, and penalties for violations under relevant laws.

【What Are the Key Ideas for Debt Resolution in Provincial Budget Reports?】

Recently, provinces have disclosed their 2026 budget reports. Many mention the importance of preventing and resolving risks in key areas, adopting a bottom-line mindset to coordinate development and security. These reports reveal strategies for resolving local debt issues. Yuan Haixia, President of China Chengxin International, states that debt management should focus more on efficiency and sustainability. She suggests orderly debt resolution, strengthening fiscal and financial resource coordination, and adjusting debt resolution policies dynamically. She recommends prioritizing “promoting development” as the main theme, optimizing financing policies, and relaxing local debt ratio assessments based on debt progress and risk levels, considering liquidity pressures, and appropriately allocating debt resolution resources. She also emphasizes categorically addressing “iceberg problems” in debt resolution, such as debt arising from operational activities, by improving debt restructuring and exchange methods through market-based and legal channels, including debt extension and swaps. Further measures are expected to be introduced this year.

【Rural Commercial Banks “Buy Up” Ultra-Long Bonds; Small and Medium Banks Net Purchases of CNY 28.5 Billion 30-Year Government Bonds on Feb 25】

Last week’s bond market was volatile, with rates initially rising then falling. As of February 28, active 10-year and 30-year government bonds yielded 1.79% and 2.235%, respectively. Two notable features: large banks mainly held bonds of 10 years or less, but their purchases of 7-10 year bonds slowed; meanwhile, small and medium banks aggressively bought 30-year bonds, totaling CNY 38.6 billion in 20-30 year maturities, a significant increase. An unusual point is the net buy on February 25, when the 30-year bond yield rose by 1.24 basis points on February 25 and 4.01 basis points on February 26 (according to ChinaBond valuation curve). During these days, small and medium banks net purchased CNY 28.5 billion and CNY 9.3 billion of 30-year bonds, respectively. This is atypical because their usual strategy is to buy more when yields rise. The large volume of CNY 28.5 billion suggests some banks had a clear over-allocation on February 25, possibly due to the bond’s relative value amid rising yields.

【First Batch of Convertible Bonds in the Year of the Dragon Launch; Refinancing Rules May Sustain Market Expansion】

Due to the Spring Festival holiday, only one new convertible bond was issued in February. However, issuance is expected to pick up sharply in early March: on March 2, Tonglian Convertible Bond opened for online subscription; on March 3, Xianghe Convertible Bond followed. An analyst notes that issuance speed this year is significantly faster than last year. With policy support and strong market demand, the total issuance scale is expected to exceed previous expectations.

【Dongwu Securities: Planning to Acquire Donghai Securities; Trading Halted Today】

Dongwu Securities announced that it is planning to acquire control of Donghai Securities through issuing A-shares. The company’s A-shares will suspend trading from the market open on March 2, 2026, for up to 10 trading days.

【Sichuan Province Receives CNY 161.9 Billion in Advance for 2026 New Government Debt Quota】

The Sichuan Provincial Finance Department reported that the Ministry of Finance has pre-allocated CNY 161.9 billion of new government debt quota for 2026, including CNY 26 billion for general bonds and CNY 135.9 billion for special bonds. To support economic and social development, the provincial government plans to issue within this quota: CNY 25.66 billion in general bonds (CNY 5 billion by the provincial level, CNY 20.66 billion transferred to cities/counties); CNY 135.9 billion in special bonds (CNY 110.8 billion transferred to cities/counties, CNY 25.1 billion to be arranged later); and CNY 340 million in direct loans from the central government to international organizations, all transferred to local governments.

【Shenzhen Releases Implementation Plan for Supporting Consumption Upgrades with Ultra-Long Special Bonds (2026)】

On February 28, Shenzhen Development and Reform Commission and other departments issued the “Implementation Plan for Supporting Consumption Upgrades with Ultra-Long Special Bonds (2026).” The plan coordinates central and municipal bond funds, focusing on auto, home appliances, digital, and smart products. By the end of 2026, it aims to replace about 35,000 scrapped vehicles, upgrade around 180,000 vehicles, replace approximately 1.8 million home appliances, and purchase about 4 million smartphones, tablets, smartwatches, and glasses. It also plans to promote smart home products, including aging-friendly designs, and other intelligent devices, to stimulate market consumption.

【10-Year US Treasury Yield Falls to Lowest Since April 2025】

On March 2, during trading, the 10-year US Treasury yield dropped to its lowest level since April 2025. The 5-year yield also fell to its lowest since October 2024.

Open Market:

The People’s Bank of China announced that on February 27, it conducted CNY 269 billion of 7-day reverse repos at a fixed rate of 1.40%, with all bids successful, resulting in a net injection of CNY 2.69 trillion for the day.

Credit Bond Events

■ Huaxia Happiness: Temporarily recruiting restructuring investors;

■ China Aoyuan: Its Hong Kong properties are under receivership, which will not be delayed;

■ “21 Xian Construction MTN001” default progress: a financial debt committee involving 16 financial institutions has been established;

■ Aoyuan Group: “H20 Aoyuan 2” failed to pay about CNY 405 million principal and interest due on February 28, 2026;

■ Hu’an Securities: Controlling shareholder Anhui Guokong Group plans to buy convertible bonds and increase holdings through conversion;

■ “16 Longxin MTN001” default progress: restructuring plan extension postponed to May 21, 2026;

■ Hubei United Transportation: Shandong Expressway Hubei Development transferred its 49% stake to Hubei Transportation Group;

■ “23 Guanggu Financial MTN002” (Sci-Tech Innovation Notes): coupon rate cut by 378 basis points to 1%, with put options available from March 2 to March 6.