Event: on March 16, 2022, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems. The meeting was presided over by Liu He, member of the Political Bureau of the CPC Central Committee, vice premier of the State Council and director of the Finance Committee. The meeting pointed out: we should coordinate the epidemic prevention and control and economic and social development, keep the economic operation within a reasonable range, and maintain the smooth operation of the capital market. The meeting mentioned: “we should earnestly revitalize the economy in the first quarter, take the initiative to respond to monetary policy, and maintain a moderate growth in new loans.”, “With regard to real estate enterprises, it is necessary to timely study and put forward effective risk prevention and resolution solutions, and put forward supporting measures for the transformation to a new development model”, “with regard to the stability of Hong Kong’s financial market, the mainland and Hong Kong regulators should strengthen communication and cooperation”.
Vice Premier Liu he presided over the special meeting of the financial development committee, which is intended to stabilize the expectations of the economy, finance and capital markets. In response to the main problems worried by the market, they responded one by one, clarifying the stability of credit, real estate, market, etc., the stability maintenance attitude is clear, and the stability maintenance policy may be effective.
Reiterate the view that we continue to be optimistic about bank stocks, and the market driven by steady growth and steady real estate continues. We still believe that macro demand is weak and the effectiveness of stabilizing growth is not achieved. We should not be overly pessimistic. Policies will still work. The economy has a cycle and there is room for policies. We wait for the strength and effectiveness of policies. Individual stocks continue to recommend high-quality urban rural commercial bank: Bank Of Chengdu Co.Ltd(601838) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Hangzhou Co.Ltd(600926) , etc. continuous recommendation of core targets: Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , focusing on the value of undervalued targets.
Maintaining financial “stability” is the core
This meeting is a “special” meeting. The time point of the meeting is that after the conflict between Russia and Ukraine, the capital market has been greatly adjusted, the social finance credit is lower than expected, the differences caused by economic data and the expansion of the epidemic, which is intended to maintain stability and stabilize expectations. Pay attention to relevant policies and measures to further stabilize expectations.
To increase new loans, financial institutions must support the real economy. The demand side policy may focus on the lower than expected credit volume and structure in February, clarify the growth of new credit, clarify the requirements of credit easing, and stabilize market expectations. It is clearly mentioned that “financial institutions must proceed from the overall situation and firmly support the development of the real economy”, and wide credit and stable growth must be implemented. In the “special meeting held by the CBRC to convey, study and implement the spirit of the meeting of the financial commission of the State Council”, the CBRC further clarified: “promote the financing increment, expansion and price reduction of small, medium-sized and micro enterprises. All departments and local offices should encourage banking and insurance institutions to innovate, support national scientific and technological research, and better serve key core technology research enterprises and” specialized and special new “enterprises. Improve the quality and efficiency of financial services and rural revitalization, and help “new citizens” live and start businesses in cities and towns. ” Considering that the actual credit demand is weak at present, the wide credit needs to be matched with the policies of steady growth such as finance and real estate, and the demand policy must be strengthened.
Clearly put forward the real estate risk prevention and resolution plan, as well as the supporting of the new model. Recently, the risk events of real estate enterprises have appeared one after another, the liquidity risk of the real estate industry has been spreading, and the early policies have not solved the liquidity problem of real estate, causing market concerns. Local real estate policies have been continuously relaxed. In the “special meeting held by the CBRC to convey, study and implement the spirit of the meeting of the financial commission of the State Council”, the CBRC made it clear: “encourage institutions to carry out M & A loans in a stable and orderly manner, and focus on supporting high-quality real estate enterprises to merge and acquire high-quality projects of difficult real estate enterprises”. From the real estate investment data in February, the problems of the real estate industry have not been fully reflected on the investment side. As the pressure caused by real estate gradually appears, the real estate stabilization policy will continue to be introduced in the future.
Risk tip: the economy has fallen sharply and real estate risks have erupted in an all-round way.
