Key investment points:
Economic data made a good start
Strong industrial production. From January to February 2022, the added value of industries above designated size increased by 7.5% year-on-year, with the previous value of 4.3%. Excluding the base effect, the three-year average growth rate from January to February reached 7.9%, and the two-year average growth rate in December last year was 5.8%. In addition, it is worth noting that the two-year average growth rate of industrial added value from January to February last year was 8.1%, that is, in the first two months of this year, industrial production maintained a high growth under the condition of a high year-on-year base. On the one hand, the production of industries with obvious supply constraints improved due to the dual control of energy consumption in the early stage; On the other hand, export resilience still plays a leading role in relevant industrial chains. In terms of three major industries, mining, manufacturing and public utilities were 9.8%, 7.3% and 5.9% year-on-year from January to February respectively, and the previous values were 6.1%, 5.7% and 6.6% respectively. In terms of the growth rate of main industrial output, the growth rate of raw coal, crude steel and automobile output rebounded, especially the growth rate of automobile output rebounded by 7.7 percentage points compared with the previous value, indicating the improvement of core shortage and the decline of the growth rate of cement and steel output.
Infrastructure rebounded as scheduled, the manufacturing industry was greatly affected by the base, and the real estate expectation was still weak. From January to February 2022, the total amount of fixed asset investment completed increased by 12.2% year-on-year, with the previous value of 4.9%. Excluding the base effect, the three-year average growth rate from January to February was 4.6%, and the two-year average growth rate in December last year was 3.9%, indicating that the growth rate of fixed asset investment has improved. However, the average growth rate from January to February last year was only 0.96%. The low base has a certain impact on the recovery of investment growth. From January to February last year, the growth rate of real estate investment (excluding real estate investment) and manufacturing industry increased. Infrastructure construction, as an important starting point for steady growth, is gradually developing, which also reflects the policy direction of moderately advancing infrastructure investment The growth rate of manufacturing investment is mainly affected by the low base in the same period last year. Whether the decline is sustainable still needs to be tracked, but the 1.5 trillion yuan tax rebate will improve the cash flow of manufacturing enterprises to a certain extent. Although the growth rate of real estate investment is better than that at the end of last year, high PPI may contribute to it. In terms of sub indicators, the growth rate of construction area has changed from negative to positive, and the growth rate of new construction area has narrowed. In terms of capital sources, although self raised funds and loans have improved, advance receipts and personal mortgage loans are still depressed, which is consistent with the performance of real estate sales data and new medium and long-term loans of residential departments. With the marginal relaxation of real estate policy, it is expected that the repair will still take some time. It is expected that the gradual stabilization of real estate investment may be seen in the second half of the year.
Consumption performed well during the Spring Festival, but may fall back in March. From January to February 2022, the total retail sales of social consumer goods increased by 6.7% year-on-year, with the previous value of 1.7%. Excluding the base effect, the three-year average growth rate from January to February was 4.3%, and the two-year average growth rate in December last year was 3.1%, indicating that consumption has improved during the Spring Festival this year. Consumption data picked up. During the Spring Festival this year, the epidemic prevention and control was more accurate, and the number of people returning home increased. At the same time, promotion factors such as “online New Year’s festival” also had a certain impetus. The optional consumption represented by cars has a certain support, and the growth rate of car sales has increased from – 7.4% to 3.9%. In addition, retail products with obvious Spring Festival characteristics such as gold, jewelry and beverages also have a relatively good growth performance. However, judging from the recent multiple outbreaks in various places, the follow-up will still cause some disturbance to consumption. It is expected that the consumption data in March may fall.
On the whole, the economic data from January to February achieved a good start, but we still need to pay attention to the base, weak quarter on quarter adjustment and deviation from high-frequency data. At the same time, the financial data in February is slightly weaker than expected, indicating that the real demand may still not be strong. Superimposed with the impact of overseas geopolitical situation, high inflation and monetary tightening in developed economies, we believe that the policy of stabilizing the economy is still expected to continue to work.
Central bank incremental renewal MLF
On March 15, the central bank launched a one-year MLF operation of 200 billion yuan and a seven-day reverse repurchase operation of 10 billion yuan. The bid winning interest rates were 2.85% and 2.1% respectively, which were the same as the previous period. On that day, 10 billion yuan of reverse repurchase and 100 billion yuan of MLF expired.
Although MLF did not reduce the interest rate in March, the incremental continuation also reflects the care of the market to a certain extent
The direction of liquidity stability. We believe that although the economic data from January to February achieved a good start for the whole year, the pressure of subsequent steady growth still exists. In addition, the government work report proposed to make the majority of market participants feel the improvement of financing convenience and the real decline of comprehensive financing costs. From January to February, the performance of financial data is not weak, but the single month data in February still shows insufficient demand, and the reduction of reserve requirements and interest rates is still in the monetary policy toolbox of the central bank.
Financing funds
On March 14, the balance of A-share financing was 1614756 billion yuan, an increase of 1.396 billion yuan month on month; The balance of margin trading was 1706098 billion yuan, a decrease of 1.254 billion yuan month on month. The balance of financing minus securities lending was 1523414 billion yuan, an increase of 4.046 billion yuan month on month.
Land stock connect and Hong Kong stock connect
On March 15, the net purchase transaction of land stock connect on that day was -16.024 billion yuan, including 57.848 billion yuan of purchase transaction and 73.873 billion yuan of sales transaction, with a cumulative net purchase transaction of 1590806 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $9.384 billion on the same day, including a purchase transaction of HK $39.823 billion and a sale transaction of HK $30.44 billion, with a cumulative net purchase transaction of HK $2272897 billion.
Money market
On March 15, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 2.0630%, down 0.00bp, Shibor week was 2.1220%, up 1.80bp. The weighted interest rate of pledged repo of deposit institutions was 2.0550% overnight, down 0.91bp and 2.1334% a week, up 2.26bp. The 10-year yield to maturity of China national debt was 2.8177%, up 5.00bp.
Overseas stock market
On March 15, the Dow Jones Industrial Average closed at 3354434 points, up 1.82%; The S & P 500 index closed at 426245 points, up 2.14%; The NASDAQ index closed at 1294862, up 2.92%. European stock markets, French CAC index closed at 635500 points, down 0.23%; Germany’s DAX index closed at 1391727 points, down 0.09%; The FTSE 100 index closed at 717570, down 0.25%. In the Asia Pacific market, the Nikkei index closed at 2534648 points, up 0.15%; The Hang Seng Index closed at 1841508, down 5.72%.
Foreign exchange rate
On March 15, the dollar index fell 0.07% to 990292. The euro rose 0.06% against the dollar to 1.0951. The dollar rose 0.10% against the yen to 1183095. The pound rose 0.25 per cent against the dollar to 1.3038. The spot exchange rate of RMB against the US dollar closed at 6.3800, depreciating by 0.32%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3823, up 0.20%. The central parity rate of RMB against the US dollar closed at 6.3760, depreciating by 0.40%.
Gold, crude oil
On March 15, Comex gold futures fell 1.74% to close at US $191920/oz. WTI crude oil futures fell 6.55% to close at US $93.66/barrel. Brent crude oil futures fell 6.84% to close at US $98.75/barrel. COMEX copper futures fell 0.29% to close at US $4.4870/lb. LME copper three-month futures rose 0.05% to close at US $9892 / ton.
