The national financial work conference was held; The State Council decided to continue to implement some preferential policies for individual income tax. The order of asset allocation of major categories: bulk > bonds > stocks > currencies.
Review of macro highlights
Economic data: in November, the profits of Industrial Enterprises above designated size increased by 9% year-on-year; In December, the manufacturing PMI index was 50.3.
Highlights: the central rural work conference was held; The State Council decides to continue to implement some preferential policies for individual income tax; The national financial work conference was held; The central bank working meeting stressed that the prudent monetary policy in 2022 should be flexible and appropriate; The national tax work conference stressed that the policy of large-scale, phased and combined tax reduction and fee reduction should be earnestly implemented in 2022; The regional comprehensive economic partnership agreement (RCEP) entered into force on January 1.
Asset performance review
Continue to be bullish on RMB assets in 2022. This week, the CSI 300 index rose 0.39%, and the CSI 300 stock index futures rose 0.23%; Coking coal futures fell 3.24% this week, and the main iron ore contract fell 4.6% this week; The expected yield of financial management of joint-stock banks increased by 89bp to 2.81%, and the 7-day annualized yield of yu'e Bao increased by 3bp to 2.08%; The yield of ten-year Treasury bonds fell 4bp to 2.78%, and the active ten-year Treasury bond futures rose 0.39% this week.
Asset allocation suggestions
Asset allocation: bulk > bonds > stocks > currencies. Both the central bank and the Ministry of Finance held working meetings this week. In terms of monetary policy, it still emphasizes soundness, flexibility and moderation, as well as maintaining reasonable and sufficient liquidity, keeping the growth rate of money supply and social financing scale basically matching the economic growth. In terms of real estate financial policy, it focuses on the prudent management system of real estate finance, reasonable housing demand, virtuous circle and healthy development of the real estate industry, Combined with the fact that the PMI index of the real estate industry continued to decline in December compared with November, we believe that the growth rate of real estate fixed asset investment in 2022 is still under pressure. In terms of fiscal policy, more efforts were made. First, some preferential policies on individual income tax were continued. Second, the interest on tax deferment of domestic sales tax of processing trade enterprises was temporarily exempted. Third, the financial work conference proposed to increase the central government's transfer payment to local governments and reasonably arrange special bonds of local governments. With the arrival of new year's day, Spring Festival holiday and new investment cycle, the market will expect and pay more attention to consumption and infrastructure investment.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The impact of the global covid-19 epidemic has expanded.
