Credit, social financing, and M2 overall decline in July, financing demand has cooled down significantly, credit contraction may come to an end |

Original title: July credit, social financing and M2 all fell

The Financial Association (Beijing, reporter Zhang Xiaochong). The central bank announced on Wednesday financial data for July, showing that credit, social financing and broad money (M2) fell across the board that month. Market participants pointed out that the demand for financing in July has cooled significantly, and the credit contraction has not ended but is coming to an end.

Data show that the increase in social financing in July was 1.06 trillion yuan, which was 636.2 billion yuan less than the same period last year. In July, RMB loans increased by 1.08 trillion yuan, an increase of 90.5 billion yuan over the same period last year. The balance of broad money (M2) was 230.22 trillion yuan, a year-on-year increase of 8.3%.

Previously, according to the recent “C50 Wind Direction Index” survey data of the Financial Associated Press, market institutions predicted that the median value of new RMB loans for the month was 1.1 trillion yuan, and the predicted median value of the increase in social financing scale was 1.8 trillion yuan. Broad money (M2) The predicted median growth rate is 8.8%.

Zhao Wei, chief economist of Kaiyuan Securities, said that the effects of real estate regulation and debt supervision have accelerated to become more visible, and the financing contraction caused by weak demand can be superimposed, or the credit “shrinkage” may be further strengthened. Indicators such as Social Finance and Purchasing Managers Index (PMI) show that the downward trend of the economy is clear, and it is difficult for financial post-positioning to change credit contraction and economic trends.

Wang Qing, chief macro analyst at Oriental Jincheng, told the Financial Association that the boosting effect of the central bank’s RRR cut on credit and social financing will be reflected in August. It is expected that financial data will rebound in full in August, and it will be “tightened credit” since the beginning of the year. The process is coming to an end, and July financial data is at the bottom of this round of “tight credit” process.

　　Social finance fell beyond expectations, but it may be in the process of bottoming

Data show that the stock of social financing at the end of July was 302.49 trillion yuan, a year-on-year increase of 10.7%. From a structural point of view, the balance of RMB loans issued to the real economy at the end of July accounted for 61.3% of the stock of social financing in the same period, a year-on-year increase of 1 percentage point.

　　Soochow SecuritiesThe macro team pointed out that, in addition to the lack of government financing, the shrinking of off-balance sheet financing reflects the dual pressures of stricter supervision and economic slowdown. In terms of off-balance sheet financing, the substantial reduction in trusts and undiscounted bills of exchange once again reflects the pressure of real estate and local implicit debt supervision, resulting in insufficient financing demand for the real economy.

　　Minsheng BankLead researcher Wen Bin pointed out that this month’s social financial stock increased by 10.7%, a decrease of 0.3 percentage points from the previous month and the lowest level since the epidemic last year. The new social financing was lower than expected, and the non-standard pressure drop and the slow issuance of government bonds were the main reasons.

Wen Bin also said that social financing is in the process of building a bottom, and the decline in social financing reflects the general trend of managing off-balance-sheet financing. The obvious weakness of government bond financing is expected to accelerate the issuance of government bonds, thereby supporting the growth of social financing. However, the gradual increase in the base of social financing last year also means that the growth rate of social financing in the next stage is likely to remain low and fluctuate.

　　Medium- and long-term loans for enterprises fell for the first time, and the decline in residential medium- and long-term loans expanded

The data also showed that household loans increased by RMB 405.9 billion in July, of which short-term loans increased by RMB 8.5 billion, medium and long-term loans increased by RMB 397.4 billion; corporate (institution) loans increased by RMB 433.4 billion, of which short-term loans decreased by RMB 257.7 billion. Long-term loans increased by 493.7 billion yuan, bill financing increased by 177.1 billion yuan; loans from non-banking financial institutions increased by 177.4 billion yuan.

Wang Hao, a senior researcher at the Zhixin Investment Research Institute, pointed out that short-term credit and bills of the corporate sector declined significantly in July, and medium- and long-term loans maintained steady growth. Both the short-term and medium- and long-term credits of the residential sector have fallen sharply. The former is mainly affected by seasonal factors, and the latter is closely related to the recent strict real estate control policies.

Soochow Securities’ macro team believes that mid- and long-term loans have cooled down, and short-term loans have experienced a super-seasonal decline. Under the dual pressure of strengthening supervision of real estate and local hidden debts, residential and corporate medium- and long-term loans have cooled. In addition, the unexpected shrinking of short-term loans was also an important drag on credit in July. Taking into account the growth rate of M1 and changes in deposits, the pressure on business operations has increased significantly, and the recovery of residents’ willingness to consume under the repeated epidemic has been hindered.

　　M1 hit an 18-month low, the scissors gap between M2 and M1 continued to expand

The data shows that the balance of M2 at the end of July was 230.22 trillion yuan, an increase of 8.3% year-on-year, and the growth rate was 0.3 and 2.4 percentage points lower than the end of the previous month and the same period last year respectively; the balance of narrow money (M1) was 62.04 trillion yuan, an increase of 4.9% year-on-year , The growth rate was 0.6 and 2 percentage points lower than the end of last month and the same period of last year respectively; the balance of currency in circulation (M0) was 8.47 trillion yuan, a year-on-year increase of 6.1%. Net cash invested in the month was 37.1 billion yuan.

Zhao Wei said that both the growth rates of M1 and M2 have fallen sharply, which also reflects the obvious contraction of bank derivatives. In July, M1 fell by 0.6 percentage points from the previous month to 4.9%, a record low in 18 months, and M2 fell by 0.3 percentage points year-on-year to 8.3%. The decline in M1 was related to the year-on-year decrease in corporate demand deposits; the decline in M2 was directly due to the sharp contraction of residential deposits and non-bank deposits.

　　Huatai SecuritiesFixed-income Zhang Jiqiang team pointed out that in July, deposits fell super-seasonally. In addition to factors such as loan derivation, there may be the impact of lower interest rates after deposits plus reforms. In addition, at the end of the quarter, banks have demand for deposits, a large amount of wealth management is converted to general deposits, and after the cross-season returns to wealth management, it will also bring about changes in the deposit structure between residents and non-banks.

Wen Bin also pointed out that comparing this month’s M2 and new RMB loans, it is found that the ability to derive credit is not outstanding. July is the traditional month for tax payment, which is equivalent to an increase in currency withdrawal, which has led to a decline in the growth rate of M2.

Editor in charge: Zhang Mei