Macro monetary performance
Chinese currency
Since the beginning of the year, the central bank has continued to release easing signals to stabilize market expectations and help achieve a good start in credit. The overall volume and price of money remained within a reasonable range. The first quarter is an important window period of easing, so we need to pay attention to the operation space of follow-up monetary policy.
Monetary volume: in January, the easing signal of the central bank was clear, and the efforts to maintain stability were increased to ensure reasonable and abundant liquidity and loose overall capital during the Spring Festival. In terms of open market operation, the central bank carried out a total of 1690 billion yuan reverse repurchase operation and 700 billion yuan one-year MLF operation this month. After the expiration of 1290 billion yuan reverse repurchase and 500 billion yuan MLF, the central bank invested 400 billion yuan in full caliber net funds this month. Based on the loose signals frequently released by the central bank, there are still loose expectations of reducing reserve requirements and interest rates in the first quarter.
Currency price: at the end of January, the market interest rate was divided as a whole, and the short-term interest rate rose as a whole. As of January 30, the overnight Shibor rose slightly by 9.2bp to 2.1550%, and the inter-bank deposit institution pledge repo weighted interest rate (dr007) rose by 19.99bp to 2.3056%. In terms of medium-term interest rate, the yield on maturity of three-month interbank certificates of deposit rose by 0.28bp to 2.3151%. Shibor fell slightly by 2.3bp to 2.4980% in six months. The long-term interest rate fell slightly, and the yield of 10-year Treasury bonds fell 1.03bp to 2.6997%. The medium and long-term interest rates were basically stable.
Global currency
In the post epidemic era, ultra loose stimulus led to high inflation in various countries. With the continuous repair of overseas economies, the focus of monetary policies of various countries on high inflation has increased, and the normalization of monetary policies of major central banks represented by the Federal Reserve has accelerated.
Monetary volume: the total assets of the Federal Reserve were 8.86 trillion yuan (January 26), and the total assets continued to rise. In January, the Fed continued to release hawkish remarks, and monetary normalization has been half way. It is expected to raise interest rates as soon as March and shrink the table in June. The FOMC meeting showed that as the U.S. economy continues to repair, the Federal Reserve has put curbing inflation in the first place, the current round of monetary tightening has accelerated, and the follow-up process may exceed expectations. The total assets of the European Central Bank are 8.62 trillion euros (January 28). The total assets are rising. The European Central Bank continues to maintain the current monetary policy, but the relevant wording has changed. It has abandoned the statement of “no interest rate increase during the year” and released the “Hawk” signal. The subsequent monetary policy may usher in a shift. The Bank of England has raised interest rates continuously for the first time since 2018 (25bp in December and January respectively). It is worth noting that the four members voted to raise the interest rate by 50 basis points to 0.75%. As UK inflation rose to a 30-year high, the Bank of England tightened further. The total assets of the Central Bank of Japan were 725.14 trillion yen (January 31), and the total assets continued to rise. The Bank of Japan still maintained its ultra loose policy statement, but due to the continuous high inflation in China, the PPI index hit a new high since 1990. In the follow-up, we need to be vigilant about the Bank of Japan’s revised position.
Currency price: in the short term, the quoted interest rate of US dollar fluctuates. As of February 3, the LIBOR of the US dollar continued to rise compared with the previous period, rising 0.37bp to 0.0784%; The secured overnight financing rate (sofr) fluctuated slightly during the week, rebounded to 0.05% on Friday (January 28), and then remained stable; The trading volume of overnight reverse repo fluctuated higher. In the medium and long term, the tightening expectation of the Federal Reserve remains unchanged, and the US debt rises across the board. The yield of two-year US bonds rose by 18bp to 1.19%, the yield of 10-year US bonds rose by 7bp to 1.82%, and the long-term and short-term interest rate spreads narrowed again. Affected by the reverse monetary policies of the two countries, the interest rate difference between China and the United States narrowed slightly by 2.89bp, and the interest rate difference between China and Europe fluctuated slightly by 4.54bp. The US dollar index fell 29.07bp to 95.3410, and the US dollar / RMB central parity rose 2.54bp to 6.3746 compared with the previous period, putting pressure on the RMB.
A-share market liquidity
Capital supply side
Throughout January, the total capital supply was 99.288 billion yuan, a decrease of 148.993 billion yuan compared with December last year, far lower than the average value of nearly half a year (195.264 billion yuan). In the last week of January, the total capital supply dropped sharply to 10.365 billion yuan, a decrease of 22.853 billion yuan compared with the previous value, which is the lower value of the weekly total supply in recent six months. In terms of sub item funds, in January, except that the net inflow of ETF funds increased compared with the previous month, the net inflow of funds, financing balance and new issuance of public funds decreased significantly compared with the previous month.
In terms of northbound capital, although it maintained a net inflow trend of 16.775 billion yuan, the inflow increased by 72.217 billion yuan less than that of the previous month. In the last week of January, due to the upcoming interest rate hike cycle of the Federal Reserve, global liquidity tended to tighten, the “good start” of A-Shares was not as good as expected, and the RMB exchange rate fell, resulting in a large decline in the overall net inflow of northbound capital in January, The net inflow trend of funds going north for five weeks was changed, and the net outflow was 26.071 billion yuan, the largest since April 2020. In terms of financing balance, the core index fell, the market panic intensified, and the financing balance decreased significantly. The net outflow in January was 63.622 billion yuan, down 51.705 billion yuan from the previous value, far below the half year average (169 million yuan). In terms of public funds, on the whole, affected by a shares, the new development fund performed poorly in the beginning of the year, with a circulation of only 101.339 billion yuan, far lower than the annual average of 174.71 billion yuan, a month on month decrease of 32.981 billion yuan. However, in terms of performance within the month, the new development fund has gradually warmed up and its circulation has gradually increased, reaching 46.446 billion yuan in the last week, with a significant increase of 17.194 billion yuan on a weekly basis, breaking the weekly average. With the repair of the stock market in February, the new development fund is expected to turn upward. In terms of ETF, the net inflow of ETF fund in January increased by 7.911 billion yuan from the previous month to 44.797 billion yuan, which was much higher than the average of nearly one year (28.3 billion yuan), maintaining the net inflow trend for five consecutive months. As a reservoir of a shares, the performance of ETF fund highlights that the inner market funds are in the water storage stage. When the current industry style is not clear, wait for the opportunity.
Under the steady growth policy and liquidity easing policy, the downward space of A-Shares narrowed after the festival, the market will gradually return to rationality and risk appetite will gradually return. Combined with the last week of January, ETF and public funds accelerated the inflow against the trend, which also showed the market’s optimism after the festival and alleviated the downturn in the first three weeks of January.
Capital demand side
The total capital demand decreased simultaneously, down 152.862 billion yuan from the previous month to 129.818 billion yuan, lower than the average value of nearly half a year (170.293 billion yuan). The financing scale of the primary market, the reduction scale of industrial capital and transaction costs decreased. In January, the primary market financing was 57.21 billion yuan, down 89.385 billion yuan from the previous week, lower than the average of nearly one year (66.704 billion yuan); The reduction of industrial capital was 32.627 billion yuan, down 47.405 billion yuan from the previous week, slightly lower than the average value of recent year (41.811 billion yuan); The market value of sales restrictions and lifting of restrictions rose to 391.4 billion yuan, an increase of 257.7 billion yuan over last week, a higher value since the beginning of the year, and will continue to increase next week; The transaction cost was reduced to 39.982 billion yuan, slightly lower than the average value of nearly one year (42.184 billion yuan), and remained generally stable.
Industry capital flow
For the whole month of January, there were differences in domestic and foreign investment sentiment and industry preferences. The number of foreign capital net inflow industries and net outflow industries was basically the same, while leveraged funds were net outflow in all industries.
In the last week of January, the mood of domestic and foreign capital was low. There was only a small net inflow of funds going north in public utilities, banks, agriculture, forestry, animal husbandry and fishery, national defense and military industry, and a small net inflow of leveraged funds in textile and garment industry. There were net outflows in other industries, with large net outflows.
Foreign capital: in the last week of January, the capital going north was only a small net inflow in public utilities, banks and agriculture, forestry, animal husbandry and fishery industries. Most industries are net outflows, and industries with more net outflows are concentrated in consumption and growth styles such as medicine, biology and power equipment. In the whole month of January, there was still a large net inflow of external market into the industry. Among them, funds from northbound continued to favor banks and power equipment. The net inflow of banks was 18.329 billion yuan (the highest net inflow for two consecutive months), and the net inflow of power equipment was 5.245 billion yuan (except for the small net outflow in July 2021, the net inflow of the whole year was wide). The net outflow is concentrated in the pharmaceutical, biological and electronic industries. The pharmaceutical and biological industry continues the net outflow trend of the previous month, while the electronic industry changes from the net inflow of the previous month to the second place of the net outflow.
Domestic capital: affected by the continuous decline of the stock market in January, the sentiment of leveraged capital was poor. All industries had a net outflow, which was the same as that of last month, and the two industries with the largest net outflow were still electronics and pharmaceutical and biological industries. Recently, the attitude of domestic capital towards the pharmaceutical and biological industry is relatively low. In the past six months, only one monthly net inflow is positive, and the rest are net outflows. ETF funds have a significant net inflow, and theme and industry ETFs are favored. In January, ETF funds maintained a net inflow, and only the inflow of broad-based ETF decreased to 19.377 billion yuan, down 33.128 billion yuan from the previous month, but still higher than the average value of nearly one year (6.906 billion yuan); The inflow of theme and industry ETFs increased significantly compared with the previous period. The net inflow of theme ETFs was 77 million yuan, an increase of 6.315 billion yuan compared with the previous month, and the net inflow of industry ETFs was 25.343 billion yuan, an increase of 34.724 billion yuan compared with the previous month, which were far higher than the average value of net inflow in recent year (the average value of theme ETFs was – 1.528 billion yuan, and the average value of industry ETFs was 6.813 billion yuan). Among ETFs in the industry, the inflow of science and technology growth, large finance and large consumption sectors increased significantly. The large finance sector increased by 15.873 billion yuan compared with the previous value, of which the inflow of securities companies increased by 14.197 billion yuan. Compared with the obvious decline of the semiconductor industry in January in the science and technology growth sector, investors turned to buy ETF funds, which also restored the net inflow trend of ETFs in the semiconductor industry, In the large consumption sector, affected by the Spring Festival effect, the food and beverage industry has changed from net outflow to net inflow; One belt, one road and the central enterprises, is the net inflow of ETF. The net inflow of broad-based ETF, CSI 500 and CSI 300 decreased significantly, the net inflow of CSI 500 decreased by 6.491 billion yuan, and the net inflow of CSI 300 decreased by 24.175 billion yuan; The net inflow of gem and Kechuang 50 increased last week, but it is still small compared with the decline of net inflow of CSI 500 and CSI 300, which is not enough to offset its impact. On the whole, the inflow of broad-based ETF decreased, and the investment demand of the theme and industry was more clear.
Risk tips
The impact of the new epidemic, the monetary policy was less than expected, and the economy accelerated downward
