16 central bank support real estate! What signal?How to Affect Bank Stocks, Bond Markets and Property Markets

On November 11, the Central Bank and the China Banking and Insurance Regulatory Commission jointly issued Document No. 254, “Notice on Doing a Good Job in Supporting the Stable and Healthy Development of the Real Estate Market with Current Financial Support”, proposing six major items and 16 requirements.

This circular is more explicit about financial support for the real estate market, which mentions that it is necessary to stabilize the issuance of real estate development loans, adhere to the “two unswerving”, and treat all types of real estate enterprises such as state-owned and private enterprises equally; support individual housing loans reasonably On the basis of national policies, all localities are supported to implement differentiated housing credit policies according to city-specific policies, reasonably determine the down payment ratio of local personal housing loans and the lower limit of loan interest rate policies, and support rigid and improved housing needs.

Bank stocks benefited from rising confidence in the housing market. Bank stocks, which have been silent for a long time, turned red this morning (November 14). According to wind data, the stock prices of listed banks such as China Merchants Bank and Ping An Bank rose by more than 7% in early trading. Market participants believe that this is mainly because the central bank and the China Banking and Insurance Regulatory Commission recently released “16 measures to support the stable development of the real estate market” (hereinafter referred to as “16 financial measures”), which is good for bank stocks.

Some people in the industry pointed out that the “16 Financial Regulations” is another important measure for the current financial support for the stable and healthy development of the real estate market. The core goal of these measures is to support housing-related financing and complete the task of guaranteeing the delivery of buildings. If the measures are implemented, the risk resolution model of existing real estate and the fund provider will be clearer and more executable, and the potential loss exposure of banks is expected to be controlled.

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Financial support for real estate policies is comprehensively increased

Wang Qing, chief macro-economist of Orient Jincheng, pointed out that the introduction of the “16 Financial Measures” indicates that with the goal of guiding the real estate industry to achieve a soft landing as soon as possible, financial support for the real estate policy has been comprehensively increased. The background is that the “golden nine and silver ten” in the property market are not in good condition, and the credit risks of some leading real estate companies are still being exposed recently. At present, the real estate market is still a drag on the macroeconomic operation. With a view to stabilizing growth and controlling risks in the fourth quarter and early next year, the “16 Financial Measures” have a wide coverage and strong pertinence, and the policy efforts have been significantly increased.

In addition, among the “16 Financial Articles”, the supply-side support policies are the most abundant, covering various financing channels other than stock market financing, including commercial bank loans, policy bank loans, bond market financing, asset mergers and acquisitions, and asset management such as trusts. Product financing, etc., for financial institutions, it is also clearly required to “extend the transition period arrangement for the management policy of the concentration of real estate loans”.

Wang Qiuheng, an analyst in the real estate industry of Galaxy Securities, also said that the “16 Financial Measures” heavy measures have boosted market confidence and are the most powerful support policies in recent times. The “Notice on Doing a Good Job in Supporting the Stable and Healthy Development of the Real Estate Market” issued by the Central Bank and the China Banking and Insurance Regulatory Commission clarifies the current main tasks and directions of all parties involved in the real estate industry. Strong support policies have greatly boosted the confidence of all parties.

Wang Qing believes that these measures will not only increase the progress of “guaranteing the delivery of buildings” in the fourth quarter – it is expected that the completed area of ​​commercial housing in October will turn positive year-on-year, and will maintain rapid positive growth in the first two months of the year, but will also effectively ease housing enterprises Liquidity pressure, control the credit risk of real estate enterprises, and curb the downward trend of real estate investment.

On the demand side, the “16 Financial Articles” require “supporting the reasonable needs of personal housing loans”, especially encouraging the deferral of principal and interest repayment for personal housing loans affected by the epidemic and other factors, without affecting personal credit. These measures are mainly based on moderately reducing the down payment ratio and reasonable reduction of mortgage interest rates, increasing financial support for rigid housing demand and improving housing demand, and stabilizing market sentiment.

Wang Qing pointed out that, at present, the key to promoting the recovery of the real estate market as soon as possible is on the demand side, among which the reduction of residential mortgage interest rates is the key. Supporting role.

Wang Qing judged that there is still room for 15 to 30 basis points of downward adjustment in the 5-year LPR quotation before the end of the year. This is the most effective force for “supporting the reasonable demand for personal housing loans” at present, and it is likely to land on November 21st at the earliest. If various policies are adjusted in place, the property market may show a trend of recovery before and after the end of the year, that is, the monthly sales of commercial housing after seasonal adjustment will increase steadily month-on-month.

Finally, the “Financial Article 16” also covers support measures for the development of the housing rental market. This is mainly aimed at establishing a long-term mechanism for regulating the real estate market, and insisting on the keynote of housing and not speculating. Therefore, the introduction of the current support policies, including the “16 Financial Measures”, does not mean that the policy will be flooded in the face of the real estate industry; the future real estate support policies, including the reduction of mortgage interest rates, will also be based on gradual adjustments. Principles advance.

credit, bonds, equity“three arrows”advance in an orderly manner

It is worth noting that, with the support and guidance of the People’s Bank of China, the financing of private real estate enterprises is advancing in an orderly manner. On November 8, the NAFMII stated that it will continue to promote and expand the bond financing support tool for private enterprises (“Second Arrow”) to support private enterprises, including real estate companies, to issue bonds for financing.

The “Second Arrow” is funded by the People’s Bank of China’s re-lending, and entrusts professional institutions to support private enterprises to issue debt financing through guarantees to increase credit, create credit risk mitigation certificates, and directly purchase bonds in accordance with the principles of marketization and rule of law. . It is expected to support about 250 billion yuan of private enterprise bond financing, and the capacity will be further expanded depending on the situation.

On November 10, the NAFMII once again stated that it accepted the 20 billion yuan shelf-type registration and issuance of Longfor Group, and China Bond Development Co., Ltd. simultaneously accepted the intention of corporate credit enhancement business. In addition to Longfor Group, a number of private real estate companies are also communicating their intention to register for bond issuance. The Dealers Association and China Bond Development Corporation are actively promoting the acceptance and review work.

In the next step, the NAFMII will adhere to the “Two Unshakable”, organize ChinaBond Promotion Company to solidly promote the implementation of the “Second Arrow” policy, and continuously increase the support for private enterprises including private housing enterprises to issue debt financing. Give full play to the positive role of stabilizing market development.

Meng Xiangjuan, chief bond analyst at Shenwan Hongyuan, pointed out that the three arrows to help private enterprises to raise financing respectively refer to the promotion of private enterprise financing in three ways: credit, bonds and equity. This time, the “Second Arrow” financing support of NAFMII involves a wide range of private enterprises and has strong signal significance.

Affected by the good news, last week (November 7-November 11), the real estate bond market sentiment was significantly boosted, especially the domestic bond prices of private real estate companies that were not out of risk generally rose. Among the volatile Chinese dollar bonds, the dollar bonds of Xincheng, Country Garden, Sino-Ocean Group, Longfor, Gemdale and other entities led the rise this week.

Wang Chao, a researcher at Galaxy Futures, told the Beijing News Shell Finance that the “Second Arrow” proposed by the Inter-bank Dealers Association is a timely help for private housing companies, which can largely solve the current shortage of housing companies’ cash flow. question.

Wang Chao pointed out that the “second arrow” still focuses on improving the cash flow of private housing enterprises, and the impact on commodity prices is still focused on future demand expectations. It is only possible to increase the newly started area after the completion of the guarantee and handover of the building, thereby forming a substantial boost to the demand for bulk commodities.

bank stocksdash highcollectiveturn red

Some people in the industry believe that the “16 Financial Regulations” are more powerful in supporting the steady development of the real estate market, which has increased market confidence and benefited banks. In fact, although executives of listed banks have repeatedly stated that “banks’ risks in the real estate market are controllable” this year, real estate market risks have become one of the most worrying risks for banks in the market this year. The president of a listed bank said bluntly that the source of the bank’s risk assets is mainly loans in areas such as real estate.

“The current epidemic prevention and control and real estate risk resolution have undergone positive changes, and it is expected to form a resonance.” The research team of Zheshang Securities Bank believes that, in general, if the measures are implemented, the existing real estate risk resolution mode and fund providers will be clearer, clearer and more feasible. Strong execution, the bank’s potential loss exposure is expected to be controlled.

Wang Yifeng, chief analyst of the financial industry of Everbright Securities, also said that the policy is a link between the past and the future, and covers both sides of real estate supply and demand. The further introduction of stability maintenance policies represented by the “16 Financial Regulations” to support the stable development of the real estate market and the “Second Arrow” of the Dealers Association to support housing companies in issuing debt and financing will help alleviate real estate risks and reduce the pressure on the asset quality of the banking system.

According to the “16 Finance Articles”, commercial banks shall issue supporting financing to special loan support projects within six months from the date of issuance of this document, and will not lower the risk classification during the loan period. Wang Yifeng believes that the document makes clear institutional arrangements for the extension period, which will help real estate enterprises to make better arrangements for the development of their due and possible development.

Wang Yifeng also pointed out that in the future, there will be many favorable factors for bank dividends. The dividends from the adjustment of the listed deposit interest rate continued to be released, which helped ease the pressure on interest rate spreads. With the optimization of epidemic prevention and control measures, the economic prosperity and market-oriented financing needs are expected to be restored, which will help to improve the micro balance sheet and boost effective credit demand.At the same time, under the background of the continuous efforts of various “steady growth” measures, the annual operating performance has a stable foundation

“On the whole, the banking sector has a certain upside, and high-quality banks are still expected to perform better.” Wang Yifeng said.

Housing Enterprise Financing Environmentcontinue to improve

“According to the content of the full text, there are four main aspects of this round of New Deal worthy of attention, involving short-term and medium-to-long-term policies, giving the real estate market a ‘reassuring pill’.” Ma Hong, a senior researcher at Zhixin Investment Research Institute, said , this part mainly involves three types of financial instruments related to real estate, namely bank credit, bonds and trusts. Compared with the previous policy, the new change lies in the reasonable extension of some existing financing such as development loans and trust loans. Recently, we have seen a significant improvement in the financing margin of housing companies, and it is expected that the source of funds for housing companies will continue to improve in the next stage.

Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, also pointed out that from the perspective of trends, domestic epidemic prevention policies have been adjusted, the precision of epidemic prevention has been improved, the recovery of economic activities has accelerated, domestic bailouts and stable growth policies have continued to exert force, and financial support for the real estate market has been vigorously implemented. Confidence in the property market is expected to gradually recover, and the supply and demand ends of real estate are expected to gradually enter a virtuous circle.

Since the beginning of this year, financial regulators have repeatedly emphasized that financial institutions must meet the reasonable financing needs of the real estate market. According to the Beijing News Shell Finance reporter, a number of banks are taking action to continuously adjust the relevant strategies for financing of housing companies, and provide financing for related housing companies under controllable risks. Today, the financing environment for housing enterprises has improved.

Yin Liang, Deputy General Manager of the Corporate Banking Department (Rural Revitalization Department) of China CITIC Bank, said that China CITIC Bank actively supports on-balance sheet real estate loans, open market bond investment and bond underwriting to support the reasonable financing needs of real estate, while distinguishing project risks and Enterprise group risk, do not blindly withdraw, cut off or suppress loans.

In terms of the policy of “guaranteeing the property handover”, Yin Liang said that the bank used the innovative model of CITIC Group’s industry-finance synergy to resolve risks, and with the strong support of CITIC Group and the local government, through the “injection of liquidity + establishment of trust closed operation” model , successfully resolved the risk of a private housing enterprise project, achieved the effect of bailing out private housing enterprises, promoting the resumption of work and production of the project, and revitalizing the value of tens of billions of projects, providing a new risk resolution and real estate bailout that can be used for reference and can be promoted. ideas, new models.

China Merchants Bank President Wang Liang also pointed out at the bank’s third-quarter results conference that the bank will continue to resolutely implement the relevant national policies on the real estate industry, strengthen the forward-looking prediction of real estate risk situations, and continue to provide real estate customers, regions, businesses and Adjust the product structure, focus on central cities and strategic customers, pay attention to the merger and acquisition financing of leading companies, further strengthen post-investment and loan management, strictly implement real estate loan management requirements, strengthen project risk monitoring and analysis, and make full provision on a case-by-case basis according to specific project risks. Provisions were made to optimize risk management measures in a timely manner.

It is worth noting that the recent real estate market credit has gradually recovered. Data show that at the end of the third quarter of 2022, the balance of RMB real estate loans was 53.29 trillion yuan, a year-on-year increase of 3.2%, 4.7 percentage points lower than the growth rate at the end of the previous year; the first three quarters increased by 848.8 billion yuan, accounting for 4.7% of the increase in various loans during the same period. %. At the end of the third quarter, the balance of real estate development loans was 12.67 trillion yuan, a year-on-year increase of 2.2%. The growth rate was 2.4 percentage points higher than that of the first half of the year and 1.3 percentage points higher than that at the end of the previous year, ending the previous 15 consecutive quarters of declining balance growth. According to statistics, new real estate development loans reached 660 billion yuan during the year, an increase of 1.6 times year-on-year in the quarter.

In addition, Zhou Maohua suggested that for financial institutions, it is really necessary to exert their subjective initiative, reduce the pro-cyclical impact, support difficulties due to short-term shocks, focus on the main business, and have reasonable financing needs of housing enterprises with better qualifications. The property market will be accelerated to return to the track of stable, healthy and sustainable development.

“Financial institutions must also ensure that funds are used for practical purposes.” Zhou Maohua said that banks need the cooperation of other departments to reduce information asymmetry, and the banking department performs its duties due diligence to conduct due diligence on private small and medium-sized housing enterprises. At the same time, it establishes closed-loop management of account funds and strengthens lending. post management, etc.

Beijing News Shell Finance reporter Jiang Fan and Zhang Xiaochong

Edited by Chen Li, proofreaded by Zhao Lin