Key investment points:
The central bank issued the monetary policy implementation report for the fourth quarter of 2021
On February 11, the central bank released the monetary policy implementation report for the fourth quarter of 2022. We believe that there are the following main concerns:
Steady growth remains the top priority. The report continues the formulation of the “triple pressure” of the central economic work conference, “adhere to the word of stability and strive for progress in stability”, and change from “doing well” to “strengthening cross cycle regulation”. It will face greater pressure on steady growth and more active policies.
The attention of wide credit has increased. In terms of the main policy ideas in the next stage, compared with the third quarter, the focus is to expand credit supply. “Maintain the stable growth of the total amount of money and credit”, “guide financial institutions to vigorously expand loan lending” and “guide financial institutions to increase credit lending to areas with slow credit growth”. The overall attitude towards credit easing is consistent with the press conference on January 18, so as to avoid “credit collapse”.
Leverage has room to improve. Column 3 elaborates on the macro leverage ratio. In the fourth quarter of 2021, the macro leverage ratio has decreased to 272.5%, falling for five consecutive quarters. “The macro leverage ratio has decreased steadily, creating space for the future financial system to continue to increase the support of the real economy”. The implication is that there is room for leverage this year, which also points to credit easing.
Monetary policy will remain stable and loose. Although the term “general gate” was not added in the fourth quarter, it was re mentioned that “do not engage in flood irrigation”. We think it can not be simply interpreted as the end of loose monetary policy. Column 1 makes it clear that the judgment of monetary policy should focus on the overall operation of policy interest rate and market interest rate over a period of time, and should not pay too much attention to quantitative indicators.
Marginal relaxation of real estate policy. The report deleted “maintain the continuity, consistency and stability of real estate financial policies” and retained “no speculation in real estate”. On January 30, the real estate sales data of large and medium-sized cities are still relatively weak. The central bank pointed out that “investment in some fields is still at the bottom”, and it is expected that the real estate policy will still be relaxed marginally.
Overseas inflation remains a concern. The central bank pointed out that “in the future, the CPI operation center may rise slightly compared with the previous year and continue to operate within a reasonable range.” Overseas, the supply chain is blocked, the “wage inflation” spiral, the transmission of price increases to the downstream and other factors still lead to great uncertainty about overseas inflation. The central bank will still respond with “me first”.
On the whole, under the overall sound and loose tone of monetary policy, the attention gradually began to incline to wide credit and increased leverage, which is conducive to the repair of the real economy. The economic growth rate may show a trend of low before high during the year. The friendly macro policy environment is also favorable to the equity market.
The State Council printed and distributed the plan for promoting agricultural and rural modernization in the 14th five year plan
On February 11, the State Council issued the plan for promoting agricultural and rural modernization during the 14th Five Year Plan period, which makes comprehensive arrangements for the strategic orientation, main objectives, key tasks and policy measures for promoting agricultural and rural modernization during the 14th Five Year Plan period, so as to enhance the support and guarantee capacity of agriculture and rural areas for economic and social development and the stabilizing role of “ballast”, We will continue to improve the living standards of farmers.
The plan points out that to promote the modernization of agriculture and rural areas with Chinese characteristics, we must adhere to the ten strategic orientations, basically solve the problem of feeding the Chinese people based on China, consolidate and improve the basic rural management system, guide small farmers into the track of modern agricultural development, strengthen the support of agricultural science, technology and equipment, promote the development of the whole agricultural industrial chain, and promote rural construction in an orderly manner, Strengthen and innovate rural governance, promote the integrated development of urban and rural areas, promote the sustainable development of agriculture and rural areas, and promote the common prosperity of farmers and rural areas.
By 2025, the agricultural foundation will be more solid, the Rural Revitalization Strategy will be promoted in an all-round way, and important progress will be made in agricultural and rural modernization. The comprehensive grain production capacity has been steadily increased, and the output has remained above 1.3 trillion kg, so as to ensure the basic self-sufficiency of grains and the absolute safety of rations. We will encourage qualified areas to carry out actions to upgrade rural household appliances, implement subsidies for furniture and home decoration to the countryside and a new round of automobile to the countryside, and promote the upgrading of durable consumer goods for rural residents.
The central economic work conference proposed to ensure the supply of primary commodities, Shenzhen Agricultural Products Group Co.Ltd(000061) as one of the important primary commodities, is one of the important foundations to ensure economic operation. The plan for promoting agricultural and rural modernization in the 14th five year plan and the expectation of the upcoming Document No. 1 in 2022 may give a certain boost to agriculture and other related sectors. The financing balance decreased. On February 10, the balance of A-share financing was 1624.149 billion yuan, a month on month decrease of 954 million yuan; The balance of margin trading was 172.1346 billion yuan, a decrease of 1.136 billion yuan month on month. The balance of financing minus securities lending was 1526.951 billion yuan, a month on month decrease of 772 million yuan.
Net inflow of land stock connect and net outflow of Hong Kong stock connect. On February 11, the net purchase transaction of land stock connect on that day was 1.005 billion yuan, including 57.202 billion yuan of purchase transaction and 56.198 billion yuan of sales transaction, with a cumulative net purchase transaction of 166.297 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $392 million on the same day, including a purchase transaction of HK $17.58 billion and a sale transaction of HK $17.973 billion, with a cumulative net purchase transaction of HK $2233.72 billion. Money market interest rates rose. On February 11, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 1.8120%, up 13.90bp, Shibor one week was 2.0210%, up 5.60bp. The weighted interest rate of pledged repo of deposit institutions was 1.7985% overnight, up 13.59bp and 1.9792% a week, up 4.64bp. The 10-year yield to maturity of China national debt was 2.7891%, up 5.63bp.
European and American stock markets fell. On February 11, the Dow Jones Industrial Average closed at 34738.06 points, down 1.43%; The S & P 500 index closed at 4418.64 points, down 1.90%; The NASDAQ index closed at 13791.15 points, down 2.78%. European stock markets, French CAC index closed at 7011.60 points, down 1.27%; Germany’s DAX index closed at 15425.12 points, down 0.42%; The FTSE 100 index closed at 7661.02, down 0.15%. In the Asia Pacific market, the Nikkei index closed at 27772.93 points, up 1.11%; The Hang Seng Index closed at 24906.66, down 0.07%.
The dollar index rose. On February 11, the dollar index rose 0.37% to 96.0309. The euro fell 0.69% against the dollar to 1.1349. The dollar fell 0.47% against the yen to 115.4650. The pound fell 0.00% against the dollar to 1.3562. The spot exchange rate of RMB against the US dollar closed at 6.3592, depreciating by 0.00%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3637, depreciating by 0.06%. The central parity rate of RMB against the US dollar closed at 6.3676, depreciating by 0.13%.
Crude oil and gold rose. On February 11, Comex gold futures rose 1.82% to close at US $1860.60/oz. WTI crude oil futures rose 4.29% to close at US $93.90/barrel. Brent crude oil futures rose 3.99% to close at US $95.10/barrel. COMEX copper futures fell 3.83% to close at US $4.4415/lb. LME copper three-month futures fell 3.46% to close at US $9830 / ton.
