How to interpret the reduction of reserve requirements and interest rates in December?
The reduction of reserve requirements and interest rates fully takes into account the fundamentals of banks. On the one hand, the policy of reducing the reserve requirement is good. On the other hand, it transmits dividends to the real economy through interest rate cuts, reducing the burden on banks to transfer profits. Considering that the fundamentals of banks are still weak, it can be expected that the policy pressure of banks will continue to remain at a small level.
Both the statements of the Political Bureau meeting and the central economic work conference on monetary policy, and the discussions of the people’s Bank of China at the central economic work study conference, reflect that future policies will pay more attention to the effect of short-term credit regulation. Therefore, we believe that there is still some room for RRR and interest rate reduction in the future. Moreover, the pace of infrastructure implementation will be accelerated in the first half of next year. In order to cooperate with the advance of fiscal policy, monetary policy will also be strengthened.
How to understand social finance in November?
The social finance increment in November was 2.61 trillion yuan, slightly lower than the market average forecast of 2.81 trillion yuan. However, the year-on-year growth rate of social finance ushered in a substantive inflection point after nearly a year of decline. To some extent, it reflects the determination of the top, and hedges the decline of loans with local bonds. In the early stage of credit easing, we should not demand the synchronous improvement of total amount and structure, but pay more attention to the leading signal of policy. We expect that the growth rate of social finance will continue to improve upward in December. Next year, the financial “front” will be superimposed on the credit volume. The credit expansion in the first half of the year is worth looking forward to.
Will there be a broad currency in 2022?
Compared with short-term inflation, the policy demand for steady growth is obviously stronger. When the asset liability pricing of banks is in a rigid state, the contribution of deposit growth to asset expansion is weakened, and loose liquidity is more needed to provide lending funds. Therefore, we expect that monetary policy will increase the coordination and linkage with fiscal policy. In the first half of next year, loose policy will promote the formation of a “wide money” market environment, which is conducive to dredging the transmission effect of monetary policy to the real economy.
Individual stocks: what do you think of the investment opportunities of retail banks next year?
Retail banks will continue to enjoy excess investment returns next year, mainly based on two logics: 1) wide credit is conducive to the expansion of non interest business of retail banks. 2) Credit risk differentiation is good for low exposure retail banks. Based on this, we recommend China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , Wuxi Rural Commercial Bank Co.Ltd(600908) , Bank Of Ningbo Co.Ltd(002142) .
[investment] driven by the value cycle chain of wealth management, the flywheel effect of wealth management business on performance contribution is becoming more and more obvious. Maintain the target price of 66 yuan / share and maintain the “buy” rating.
[postal savings] next year, rural finance and county finance related to common prosperity are expected to achieve rapid development, especially benefiting the company. Maintain the target price of 6.11 yuan / share and maintain the “buy” rating.
[Wuxi] the importance of small and micro enterprises in the policy next year is self-evident. The company actively develops Pratt & Whitney small and micro businesses and opens up new performance increment space. Maintain the target price of 7.04 yuan / share and maintain the “buy” rating.
[Ningbo] at present, the company has capital and large asset allocation space. We are optimistic about its business development space and profit release prospect. Maintain the target price of 49.45 yuan / share and maintain the “buy” rating.
Risk tip: the epidemic situation is repeated, the economic downturn exceeds expectations, the asset quality fluctuates, and the introduction of policies exceeds expectations.
