text | Investment Promotion Macro Zhang Jingjing Team
Core Views
On October 11, Central Bank released the financial data for September 2022. The increase in social financing was 3.53 trillion yuan, an increase of 627.4 billion yuan over the same period last year. The social financing stock increased by 10.6% year-on-year, with the previous value of 10.5%. M2 grew by 12.1%, with the previous value of 12.2%; M1 grew by 6.4% year-on-year, with the previous value of 6.1% .
The scale and growth rate of social financing have improved. In the comments last month, we believe that there are three important fulcrums for the growth rate of social financing in the future, namely the structural tools of the central bank, policy bank and the real estate credit demand under policy support. Judging from the current situation, the demand for infrastructure financing with policy banks as the starting point has expanded significantly, which has played a key role in the growth rate of social financing and even the improvement of the credit structure of the enterprise sector. Under its influence, although the economic endogenous credit demand still needs to be further restored, the social financing data in September has been better than the expectations of most participants in the market. In the next few months, we believe that with the support of three important fulcrums, the growth rate of social financing is expected to remain near the current level.
Highlights in the credit structure: the growth rate of medium- and long-term loans in the enterprise department is rapidly recovering. The increase in medium- and long-term loans in , as an indicator that reflects the real financing needs of each entity, has always been one of the data that market participants are most concerned about. Recently, the increase in medium- and long-term loans in the enterprise sector has been significantly increased, which is likely to be related to the efforts of infrastructure-related financing needs. As the short-term approach to policy is still in infrastructure, this trend is expected to continue. According to past rules, the credit structure of the enterprise sector will generally improve 6-9 months after the total credit volume stabilizes and rebounds, which also points to the expectation of medium- and long-term loans in the enterprise sector to continue to recover. After the September data was released, we saw that the growth rate of medium- and long-term loans of enterprises had begun to rebound rapidly. Historically, its recovery has a certain leading position in the performance of the equity market.
M2's year-on-year growth rate continues to exceed expectations, which may be related to the continued low interest rates for funds. html In September, due to cross-season factors and other factors, the liquidity of the capital market began to return to neutrality, the trend of M2 still maintained a high of around 12.1%, exceeding market expectations. Since October, the liquidity of the capital market has remained relatively loose, and the situation where M2 continues to be at a high level may continue.
policy has been continuously working on the three fulcrums of the growth rate of social financing this year (structural tools, policy banks and real estate financing needs). The reuse of PSL has sparked recent market discussion. We believe that the re-activated PSL may be related to the central bank's support for the 800 billion new loan quota of policy banks, and the new loan of PSL is expected to continue to increase in the next few months. Before the National Day, real estate regulation policies were intensively introduced, and , one city, one policy, space was opened in various places. From a macro perspective, the adjustment of housing loan interest rates and provident fund interest rates is mainly aimed at the first home interest rate, and the policy of supporting residents to exchange housing and personal income tax and transfer of mortgages is mainly to provide policy support for home buyers who need replacement. In addition, with the recent advancement of the "protecting and subsidizing" policy in various places, the real estate market is expected to recover to a stable level. The relief policies currently issued are aimed at supporting the construction and delivery of residential projects that have been sold and difficult to deliver, through special loans and follow-up of loans from financial institutions. These will restore credit demand in the real estate industry.
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2022 On October 11, 2022, the central bank released the financial data for September 2022. In September, the increase in social financing scale was 3.53 trillion yuan, an increase of 627.4 billion yuan over the same period last year. As of the end of September, the stock of social financing was 340.65 trillion yuan, an increase of 10.6% year-on-year. During the same period, the balance of broad currency (M2) was 262.66 trillion yuan, an increase of 12.1% year-on-year, 0.1% lower than the end of last month and 3.8% higher than the same period last year; the balance of narrow currency (M1) was 66.45 trillion yuan, an increase of about 6.4% year-on-year, and the growth rate was 0.3% and 2.7% higher than the end of last month and the same period last year, respectively; the balance of currency (M0) in circulation was 9.87 trillion yuan, an increase of 13.6% year-on-year.
1. Financial data comments
We mentioned in previous data comments that the government's direct participation (government bond issuance) and incentives (such as the incentives for residents' loans by consumption coupons and automobile preferential policies) have always played a supporting role in this round of credit expansion . Since the special bonds for this year were nearly issued before August, the factor that has driven the growth rate of social financing in recent months will become a drag on the growth rate of social financing from August. Under such circumstances, stabilizing the growth rate of social financing requires additional policy support. In last month's comments, we believe that there are three important fulcrums for the growth rate of social financing in the future, namely the central bank's structural monetary policy tools, policy banks, and real estate credit needs under policy support. Judging from the current situation, the demand for infrastructure financing with policy banks as the starting point has expanded significantly, which has played a key role in the growth rate of social financing and even the improvement of the credit structure of the enterprise sector. Under its influence, although the economic endogenous credit demand still needs to be further recovered, the social financing data in September still increased by more than 620 billion yuan year-on-year, and the growth rate of social financing rebounded to 10.6%, better than the expectations of most participants in the market. In the next few months, we believe that with the support of three important fulcrums, the growth rate of social financing is expected to remain near the current level.
(I) The year-on-year growth rate of social financing rebounded
In September, the increase in social financing scale was 3.53 trillion yuan, an increase of 627.4 billion yuan over the same period last year. The year-on-year growth rate of social financing recorded 10.6%, and the growth rate rebounded after three consecutive months of decline. From the perspective of sub-items, government bonds and corporate bonds are the main drags on new social financing. Among them, the scale of new financing for government bonds in September increased by about 250 billion yuan year-on-year, which is the biggest drag on social financing. Of course, the reason is that the fiscal policy has made advance efforts this year, and the special bond quota for this year has been basically issued. In order to deal with this situation, the State Council has recently requested that the local government's special bond limit of more than 500 billion yuan in balance since 2019 be revitalized in accordance with the law, and the issuance will be completed before the end of October, and priority will be given to supporting projects under construction. RMB loans and off-balance sheet financing are the main contributors to the new year-on-year increase in social financing. Among them, RMB loans for social financing increased by 257 million in the month, an increase of about 800 billion yuan year-on-year, exceeding the expectations of some market participants. Since the beginning of this year, the impact of the epidemic on the real economy has further emerged. Coupled with factors such as shortage of factors and rising production costs such as raw materials, enterprises, especially small and medium-sized enterprises, have increased operating difficulties and significantly reduced demand for effective financing. On August 22, the People's Bank of once again held a credit situation analysis meeting, requiring banks to increase loans to the real economy and further improve credit support for small and micro enterprises, green development, scientific and technological innovation and other fields. Subsequently, the bill interest rate rebounded, which is likely to be accelerating the bank's credit issuance. In addition, the State Council meeting on August 24 added another quota of 300 billion policy development financial instruments, which is expected to provide support for new credit. In addition, off-balance sheet financing, which was added by entrusted loans, trust loans and undiscounted bank acceptance bills, contributed an increase of nearly 350 billion yuan year-on-year. Previously, off-balance sheet financing has contracted significantly due to the pressure reduction of the transition period of the new asset management regulations, while the current regulatory pressure has weakened. In addition, the entrusted loans have seen new financing scale of more than 150 billion yuan for two consecutive months. We believe that it reflects the use of policy-based development financial tools, and the financing scale of entrusted loans is expected to continue to maintain a high level.
(II) Medium- and long-term loans in the enterprise sector continue to recover, and the credit expansion of the residents sector has been significantly dragged down by real estate sales
In September, financial institutions added RMB loans of 2.47 trillion yuan, an increase of about 1.25 trillion yuan year-on-year. If the loan structure is split, the corporate sector will still be the main contributor to the year-on-year increase. In September, the credit of the corporate sector increased by about 1.9 trillion yuan year-on-year, of which medium- and long-term loans increased by about 650 billion yuan year-on-year. We believe that it mainly reflects the recent signs of the demand for infrastructure-related financing. Since the short-term policy approach is still in infrastructure, this trend is expected to continue. The resident sector, especially medium- and long-term loans that are highly correlated with real estate, are still in a state of less year-on-year growth.This short increase mainly reflects the situation where demand in the real estate market is still weak. According to high-frequency data, the transaction area of commercial housing in 30 cities in September increased by 7.1% month-on-month and decreased by 13.5% year-on-year, a year-on-year decrease of 5.2 percentage points from August. House prices continued to decline in September. The residential price index of 100 cities fell 0.02% month-on-month, an increase of 0.01 percentage points from August; it rose 0.15% year-on-year, a decrease of 0.17 percentage points from August, narrowing for the 16th consecutive month. At present, residents' confidence in the real estate market still needs to be further rebounded, and changes in real estate-related policies in various places need to be continued to be tracked.
medium and long-term loan increments, as an indicator that reflects the real financing needs of each entity, have always been one of the data that market participants are most concerned about. Comparing the increase in medium- and long-term loans from the resident department and the enterprise department since this year, we can see that considering seasonality, medium- and long-term loans from the enterprise department have repeatedly performed beyond seasonality under the background of policy background such as infrastructure efforts. Of course, the financing demand of some companies has declined against the background of the impact of the epidemic, the rising raw material prices and increasing uncertainty on the production side, but with the help of policies, the financing demand for infrastructure projects and other financing has effectively filled the above decline. With the further clarification of high-level policies and the operations of the People's Bank of China to lower the policy interest rate, enterprises' expectations have gradually stabilized. We believe that the medium- and long-term loan demand of the enterprise sector will generally recover in the future. Judging from the data on the resident side, the overall monthly credit of the resident department continued to increase by less than year-on-year. In September, the new medium- and long-term loans of households increased by about 650 billion yuan, an increase of about 140 billion yuan less than that year-on-year, which is the main sub-item that drags down credit. If the data from January to September are added together, the medium- and long-term loans of the residents' sector will increase by about 2.4 trillion yuan year-on-year, and the new credit of the residents' sector will indeed have weak growth. In order to deal with the above problems, local governments have successively issued policies under the tone of "housing for living, not for speculation" and "policies based on the city" to better meet the reasonable needs of the real estate market, and we need to continue to pay attention to the policy effect in the future.
In addition, from the perspective of total volume, the total loan amount in the first nine months of 2022 was stronger than last year. According to past rules, the credit structure of the enterprise sector will generally improve 6-9 months after the total credit volume stabilizes and rebounds, which also points to the expectation of medium- and long-term loans in the enterprise sector to continue to recover. We have seen that the growth rate of medium- and long-term loans of enterprises has begun to rebound. Historically, its recovery has a certain leading position in the performance of the equity market.
(III) The year-on-year growth rate of M2 continues to exceed expectations, which may be related to the low interest rate of funds
Review of this year's financial data, the first thing that triggered market discussion was the reading of M1 in January. According to data released by the People's Bank of China, the balance of M1 in January 2022 was 61.39 trillion yuan, a year-on-year decrease of 1.9% (excluding the influence of the Spring Festival staggering factors, M1 increased by about 2% year-on-year). We discussed the low growth rate of M1 at that time, and believed that the low growth rate of M1 reflects to a certain extent the real estate sales, social retail sales in January this year and the investment intention of some enterprises need to be further improved.
Recently, the rapidly recovering M2 has also sparked discussion among market participants. We believe that it mainly reflects the help of previous tax refunds and other policies to enterprises, as well as the continued abundance of liquidity in the money market since April, and some real enterprises and non-bank financial enterprises have carried out capital arbitrage. According to experience in 2020, M2 may maintain an upward trend before the liquidity of the capital market returns to neutrality. In September, due to cross-season factors and other factors, while the liquidity of the capital market began to return to neutrality, the M2 trend remained at a high of around 12.1%, exceeding market expectations. Since October, the liquidity of the capital market has improved again, and the situation where M2 continues to be at a high level may continue.
. The growth rate of social financing is among the three fulcrums of the year: policy banks, structural tools and possible real estate demand recovery
We mentioned in the July financial data "Looking for a new fulcrum of social financing" that the growth rate of social financing of 10.8% in June is likely to be the high point of this round of social financing upward cycle. However, the growth rate of social financing will definitely start a rapid downward trend.Judging from the situation in recent years, in the second half of 2019, the growth rate of social financing lasted for five months at around 10.6%. We believe that the growth rate of social financing may occur in the next few months, that is, it will remain at a certain position (such as 10.5%). There are three important fulcrums that support social financing: (1) Policy banks (2) Structural monetary policy tool (3) Possible real estate financing needs that have recovered in stages under the influence of policies.
First of all, for policy banks, the State Council meeting added 300 billion policy-based open financial instruments and 800 billion credit lines to policy banks in June. At the State Council meeting at the end of August, policy-based open financial instruments increased by another 300 billion. We used to study "Where is the space for finance?" 》 mentioned that according to the prediction of of Agricultural Development Fund, the ratio of capital investment and total investment that can be driven by projects is about 1:10. It is expected that the ratio of total investment amount of China Development Bank's fund investment should be roughly the same. According to the overall estimate, the total investment of projects that can be driven by 300 billion yuan of policy development financial bonds should exceed 3 trillion yuan. With the addition of 800 billion new credit lines, the credit scale leveraged through policy banks cannot be underestimated. You can use the data from the credit income and expenditure statement to observe the issuance of medium- and long-term loans of China Development Bank. It can be seen that in 7 and 8 months, the medium- and long-term loans it invested more than last year, and we believe that the trend is likely to continue.
Secondly, The central bank's structural monetary policy tool has always been an important tool for the central bank to maintain stable credit growth. Especially in the second quarter monetary policy implementation report, the central bank mentioned that "stable credit" will aim to "stable total volume and excellent structure", pointing out that green, low-carbon and high-tech manufacturing are the main areas of credit supply in the future. Banks often need the support of the central bank's structural tools for credit in these aspects. The "23 Finance Articles" proposed in April mentioned that structural tools are expected to drive the increase in loan issuance of financial institutions by 1 trillion yuan this year. At present, the fourth quarter will be the peak of the above loan issuance. For example, recently, , the Shenzhen Central Branch of the People's Bank of China, , announced that the first batch of re-loans for technological innovation have been implemented in Shenzhen. 21 national banks in Shenzhen issued 23.058 billion yuan in loans that meet policy requirements, benefiting 2,350 enterprises. The scale of use exceeded expectations of some market participants.
Recently, the central bank has made significant efforts in structural monetary policy tools. The People's Bank of China established a special re-loan for equipment renewal and renovation on September 28, 2022, to support financial institutions to provide loans to the manufacturing, social services field, small and medium-sized enterprises, individual industrial and commercial households at an interest rate of no more than 3.2%. From the proposal of the State Council on September 13 to the establishment of the central bank today, the rate of launching the entire tool reflects the current clear orientation of stabilizing growth. There are three differences in the special re-loan for this equipment renovation: (1) The application time is in the fourth quarter of this year, which indirectly shows that the tool is intended to provide support for new loans in the fourth quarter. (2) Fiscal and monetary linkage. In the previous State Council meeting, it was clearly stated that the loan subjects for renewal and renovated equipment in the fourth quarter were subsidized by 2.5%. This means that the actual cost of applying for a loan under this tool is only about 0.7%. (3) The scale is flexible. The central bank's statement of its scale is more than 200 billion, which means that the scale of the tool may exceed expectations.
In addition, the reuse of PSL has also triggered recent market discussions. According to data released by the central bank on October 9, the new amount of PSL in September exceeded 100 billion. This new addition is the first new PSL tool since April 2020. Since the creation background of PSL is to provide long-term, stable and cost-effective financial support for shantytown renovation, its reactivate has triggered discussions among market participants on shantytown renovation policies. We believe that the reuse of this tool has limited relationship with the policy of shantytown renovation. The central bank easily expanded the counterparty of the PSL tool to National Development Bank , China Agricultural Development Bank , China Export-Import Bank , and the scope of supplementary loans has also been expanded to support loans for major water conservancy projects, RMB "going out" projects, etc. The re-activated PSL may be related to the 800 billion new loan amount supported by policy banks.From 2015 to 2020, the average annual new shantytown renovation loan of China Development Bank was 400 billion yuan, while the average annual new quota of PSL of the three major policy banks was 480 billion yuan during the same period. We believe that the new amount of PSL is expected to continue to increase in the next few months.
Finally, is a possible recovery in real estate financing demand under the influence of policies. In total, the credit data for the first nine months of this year has met the central bank's phased requirements for "maintaining stable credit growth". From the perspective of investment, it can better reflect the current structural characteristics of credit. Emerging fields such as inclusive finance, green loans, , have become important sources of demand for new credit. However, there is a clear weakness in demand for real estate-related loans.
Since the beginning of this year, policy leaders have been continuously guiding the downward trend of mortgage loan interest rates in order to better meet the reasonable needs of the real estate market. Judging from the data, mortgage loan interest rates fell by 87BP in the second quarter, a significant decline. In August, the central bank once again lowered the 5-year LPR by 15BP through an asymmetric approach. We expect mortgage loan interest rates to fall further and real estate sales may undergo positive changes. Before the National Day, real estate regulation policies were intensively introduced, and every city and every policy was opened. From a macro perspective, the adjustment of housing loan interest rates and provident fund interest rates is mainly aimed at the first home interest rate, while supporting residents to exchange housing, personal income tax policies and mortgage transfers are mainly to provide policy support for home buyers who need replacement. In addition, with the recent advancement of the "protecting and subsidizing" policy in various places, the real estate market is expected to recover to a stable level. The relief policies currently issued are aimed at supporting the construction and delivery of residential projects that have been sold and difficult to deliver through special loans and follow-up of loans from financial institutions. These will restore credit demand in the real estate industry. According to Economic Observer, at the end of September, the central bank and the China Banking and Insurance Regulatory Commission departments required six state-owned banks, including China Construction Bank , Industrial and Commercial Bank of China , Agricultural Bank of China , Bank of China , China Postal Savings Bank , and Bank of Communications, to increase support for real estate financing. Each bank will provide at least 100 billion yuan in financing support this year, including mortgage loans, mortgage loans, development loans or bond purchases, etc. If the financing demand in the real estate market rebounds in the next period of time, it will contribute important support to social financing this year.
Risk warning:
Changes in domestic and foreign economic fundamentals exceeded expectations; monetary policy exceeded expectations.
This article is from the securities company research report selected
