Everbright SecuritiesIt is believed that the new social financing in April was significantly lower than market expectations and the level of the same period in previous years.creditThe sharp year-on-year contraction was the main source of drag. In particular, residential housing, consumption and business loans all showed a sharp year-on-year contraction. Outlook: The policy is expected to be accelerated across the board, and the LPR reduction in May is expected.currencyThe policy is expected to speed up the guidance of LPR quotations through stock and incremental policy toolsinterest rateOn the downside, the LPR is expected to be lowered in May. In April, the central bank lowered the reserve requirement ratio, turned over the balance of profits, and established deposits.interest rateThe market-oriented adjustment mechanism has significantly reduced the debt cost of financial institutions. Looking forward, the central bank is expected to continue to take multiple measures to reduce the cost of debt of financial institutions and guide the cost of social financing to continue to decline.
Research reportfull text
[Macro]The epidemic has impacted social finance, and LPR reduction can be expected – April 2022 financial data review and Everbright Macro Weekly (2022-05-14) (Gao Ruidong/Liu Wenhao Xiao)
report summary
event:
On May 13, the central bank released monetary and financial data for April. RMB loans increased by 645.4 billion yuan, a year-on-year decrease of 823.1 billion yuan; social financing increased by 910.2 billion yuan, a year-on-year decrease of 946.8 billion yuan, the social financing stock increased by 10.2% year-on-year, and the previous value was 10.6%; The previous value was 9.7%.
Core point:
The newly added social financing in April was significantly lower than market expectations and the level of the same period of previous years. The significant year-on-year contraction of on-balance sheet credit was the main source of drag. In particular, residential housing, consumption and business loans all showed a significant year-on-year contraction. The downturn in household consumption and business loans may be mainly due to the repeated impact of the epidemic on offline operations and consumption; the continued downturn in housing loans is mainly due to the fact that the residents’ expectations for real estate have not been reversed. The weakening of public and long-term loans again, the marginal drag factor may be due to the impact of epidemic control on infrastructure construction, resulting in a decline in the demand for supporting loans.
Looking forward, internal and external disturbances have intensified and weakened the demand for effective financing, and the sustainability of credit liberalization requires a comprehensive increase in various policies. On the supply side, monetary policy is expected to use stock and incremental policy tools to speed up and guide the LPR quotation rate downward, and the LPR is expected to be lowered in May. On the demand side, the regulation of real estate will be relaxed on a larger scale, and the introduction of various policies to stabilize demand expectations will be accelerated; the pace of fiscal financing and expenditure, and the pace of implementation of major projects and infrastructure projects are expected to accelerate; The measures for the return are also expected to increase. It is expected that with the weakening of the epidemic disturbance and the strengthening of the policy of stabilizing growth, the upward trend of social financing growth is expected to continue, but the height of the rebound and the degree of structural improvement remain to be seen.
Review: Intensified Internal and External Disturbances, Increased Funding Volatility
At the level of social financing structure, from the perspective of the economic sector, the pulling effect of the corporate sector shrank significantly month-on-month, the pulling effect of the government sector shrank slightly month-on-month, and the residential sector remained a drag for 6 consecutive months and the degree of drag continued to widen. “Progress” is still the main theme of financing.In terms of credit structure, bill financing increased by 243.7 billion yuan year-on-year.new creditThe main supporting items of the loan; medium and long-term loans for enterprises, residential housing loans, consumer loans, and business loans increased significantly compared with the same period last year, which are the main drag items for new credit.
Outlook: The policy is expected to be accelerated in an all-round way, and the LPR reduction in May can be expected
On the one hand, monetary policy is expected to use stock and incremental policy tools to speed up and guide the decline of LPR quotation interest rates, and LPR is expected to be lowered in May. In April, the central bank has significantly reduced the debt cost of financial institutions by reducing the reserve requirement ratio, turning over the balance of profits, and establishing a market-oriented adjustment mechanism for deposit interest rates. Looking forward, the central bank is expected to continue to take multiple measures to reduce the cost of debt of financial institutions and guide the cost of social financing to continue to decline.
The second is to relax the regulation of real estate on a larger scale, and speed up the introduction of various policies to stabilize demand expectations. At present, the expectations on the demand side of real estate have weakened significantly. To stabilize the real estate market, more policies to stabilize expectations on the demand side are required, including measures such as moderately loosening the purchase restriction policy according to local conditions, moderately reducing mortgage loan interest rates, and giving more tax incentives to buyers who just need houses. .
Third, the pace of fiscal financing and expenditure, and the pace of implementation of major projects and infrastructure projects are expected to accelerate. In the first four months of this year, the net financing of government departments accounted for 28.1% of the estimated net financing for the whole year, and there is still room for further advance financing. In addition, the 11th meeting of the Central Finance and Economics Committee and the Politburo meeting in April both called for “comprehensive strengthening of infrastructure construction”. It is expected that the pace of subsequent major projects and infrastructure projects will continue to accelerate, driving up the demand for related supporting financing.
Fourth, more measures to repair residents’ balance sheets and promote the return of residents’ consumption to the pre-epidemic stage are also expected to be introduced. It is expected that there will be more measures to stabilize employment and stimulate household consumption. For example, to provide more financial subsidies, tax credits, support policies and other measures to enterprises that attract fresh college graduates, measures such as new energy vehicles going to the countryside, subsidies for trade-in home appliances and furniture, and the issuance of consumer coupons are introduced.
risk warning:The implementation of policies was less than expected, the local epidemic of new coronary pneumonia spread widely, and the progress of major projects in various places was less than expected.
(Article Source:securitiesTimes Network)