CITIC Securities: It is expected that the scale of new special bond issuance in the second and third quarters will both exceed one trillion.

The report from CITIC Securities pointed out that the "double reduction" landing ahead of schedule on May 7, 2025, at the multi-department press conference held by the State Council Information Office, reflects the protection of the market by a moderately loose monetary policy. Looking back at the two "double reductions" since 2020, local government bond issuances have seen a significant increase after the "double reductions." The liquidity released in advance by the "double reductions" has to some extent smoothed the impact of the subsequent increase in local bond supply. For this year, the progress of new local government bond issuances remains relatively slow, with a large amount of issuance still pending. Referring to the experience of local bond issuances after past "double reductions," we expect that the scale of new special bond issuances in the second and third quarters of the year is likely to exceed one trillion, and the total annual issuance quota can be completed by the end of the third quarter.