Main points:
Market events
The people's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.5 percentage points on December 15, 2021, and release long-term funds of about 1.2 trillion yuan. Part of the funds will be used by financial institutions to repay the due MLF, and the rest will be used to supplement the long-term funds of financial institutions.
Drop the standard and add new tiles for cross cycle regulation
To implement the RRR reduction, we adhere to the three reasons for the possible RRR reduction we previously judged: first, the inflation constraint has been significantly weakened, opening up policy space. PMI data in November showed that the purchase price and ex factory price of main raw materials were 52.9% and 48.9% respectively, significantly lower than 72.1% and 61.1% in October. The effect of "maintaining supply and stabilizing price" continues to show, and the PPI will fall further and rapidly. The previous PPI of more than 10% has really put pressure on easing, but the current high point has passed, and the pressure has decreased significantly; Second, there is great downward pressure on the economy. Economic growth declined rapidly, endogenous power remained weak, consumption was plagued and suppressed by Omicron mutant strain, real estate development investment fell rapidly, and there was great pressure on growth in the fourth quarter; Third, cross cycle adjustment to deal with the growth pressure in the first quarter of next year. On the one hand, the current great growth pressure is expected to continue until the beginning of next year, and real estate investment is still continuing to decline; On the other hand, the growth base in the first quarter of next year is high. The cross cycle regulation, which has been intensively emphasized since the first half of this year, has now entered intensive areas to cope with the pressure at the beginning of next year.
Loose to confirm the basic, cross-year market can be more positive
The RRR reduction basically confirms that the liquidity level can give strong support before the first quarter of next year. In addition, we judge that the growth in December will show a weak stabilization pattern, so we can have higher expectations for the cross-year market. On the one hand, RRR reduction will help maintain a reasonable and abundant environment for macro liquidity, which will become an important support and foundation for the cross year market; On the other hand, in addition to the post placement of special bonds in 2021 serving the cross cycle, the RRR reduction indicates that additional cross cycle policies begin to be implemented. More cross cycle adjustment policies such as the front of fiscal policy in 2022, the relatively loose monetary policy in the first quarter and the adjustment of real estate financing end are expected to be introduced one after another, so as to boost the market risk appetite. The implementation of RRR reduction has strengthened the cross year market. It is suggested to actively participate in and grasp the cross year market.
The main line of growth support was strengthened, and the short-term logic of infrastructure, finance and real estate was strengthened
RRR reduction indicates that there is more than enough liquidity, which forms a strong support for further pulling out the main line of growth and valuation. In the future, it may be necessary to see the relative decline of interest rate level. RRR reduction has an obvious catalytic effect on the financial and real estate market in the short term. In terms of market allocation opportunities across the year, we focus on three directions: first, we are ushering in the third stage, pulling out the growth main line of the valuation market, and paying attention to the new energy vehicle industry chain, new energy, wind power, energy storage, photovoltaic, hydrogen energy and semiconductors; Second, the consumer sector, which is expected to continue to make up for the boom, pays attention to automobiles, agriculture, forestry, animal husbandry and fishery; Third, infrastructure and finance benefiting from steady growth, real estate with marginal changes in regulatory policies, etc; The theme focuses on opportunities such as military industry and digital currency.
Risk statement
Sino US relations deteriorated beyond expectations; Policy tightening exceeded expectations; Omicron epidemic repeatedly exceeded expectations
