Talk every Monday: when will the banking sector be configured?
This paper reviews the market of the banking sector in the past decade, which is divided into four rounds, and intends to find out the key factors for the banking sector to obtain absolute and excess returns.
From 2011 to 2013: in December 2011, the central bank announced the reduction of reserve requirement by 50bps, marking the starting point of this round of wide currency. Then, the central bank reduced the reserve requirement again in February 2012 and may 2012, and cut interest rates successively in June and July 2012. After the introduction of a series of lenient monetary policies, the growth rate of social finance hit the bottom and rebounded in June 2012, marking the starting point of this round of lenient credit. In September 2012, PMI experienced an upward turning point for the first time after continuous decline, marking the effect of easing policy and the entry of credit easing into the medium term. In May 2013, the growth rate of social finance peaked and fell, marking the gradual withdrawal of this round of credit easing.
In this round of market, the absolute return of the banking sector in the medium term of broad credit (October 7, 2012-may 31, 2013) was 37.8%, compared with the return of Wande all a by 21.8%.
From 2014 to 2017: in November 2014, the central bank announced a comprehensive interest rate cut, marking the starting point of this round of wide currency. Then, the central bank cut the reserve requirement five times in a row from February 2015 to March 2016, and cut the interest rate five times in a row from March to October 2015. After the introduction of a series of lenient monetary policies, the growth rate of social finance hit the bottom and rebounded in July 2015, marking the starting point of this round of lenient credit. In September 2016, PMI experienced an upward turning point for the first time after continuous decline, marking the effect of easing policy and the entry of credit easing into the medium term. In March 2017, the growth rate of social finance peaked and fell, marking the gradual withdrawal of this round of credit easing.
In this round of market, the absolute return of the banking sector in the medium-term (201610.1-2017.3.31) of broad credit was 4.9%, compared with the return of Wande all a by 1.1%.
20182019: in April 2018, the central bank announced a targeted RRR reduction, marking the starting point of this round of wide currency. Then, the central bank reduced the RRR five times in a row from July 2018 to September 2019, and reduced the LPR three times in a row from August to December 2018. After the introduction of a series of lenient monetary policies, the growth rate of social finance hit the bottom and rebounded in January 2019, marking the starting point of this round of lenient credit. In June 2019, PMI showed an upward turning point for the first time after continuous decline, marking the effect of easing policy and the entry of credit easing into the medium term. In July 2019, the growth rate of social finance peaked and fell, marking the gradual withdrawal of this round of credit easing. In this round of market, the absolute return of the banking sector in the medium-term of broad credit (July 1, 2019-july 31, 2019) is 7.1%, compared with the return of Wande all a by 3.9%.
2020 to may 2021: in January 2020, the central bank announced a comprehensive RRR reduction, marking the starting point of this round of wide currency. Then, the central bank continuously reduced the RRR in April 2020 and may 2020, and successively reduced the LPR in February and April 2020. After the introduction of a series of lenient monetary policies, the growth rate of social finance hit the bottom and rebounded in March 2020, marking the starting point of this round of lenient credit. In June 2020, PMI showed an upward turning point for the first time after continuous decline, marking the effect of easing policy and the entry of credit easing into the medium term. In November 2020, the growth rate of social finance peaked and fell, marking the gradual withdrawal of this round of credit easing.
In this round of market, the absolute return of the banking sector in the medium term of broad credit (July 1, 2020-november 30, 2020) is 18.1%, which is 4.2% relative to that of Wande all a.
Investment strategy: Generally speaking, looking back on the market of the banking sector in the past decade, the banking sector has obtained absolute and relative returns in the medium-term of wide credit. The year-on-year growth rate of the stock of this round of social financing scale has rebounded to the bottom in November 2021, marking that it is now in the early stage of credit easing. In the follow-up, we need to pay attention to the time of PMI inflection point under the continuous introduction of stable growth policy. It is suggested to pay attention to three main lines in this round of bank market: first, large state-owned banks with excellent performance in previous market China Construction Bank Corporation(601939) ; Second, Bank Of Nanjing Co.Ltd(601009) and Industrial Bank Co.Ltd(601166) , which have earlier layout in the field of high-end manufacturing and green loans, and third, China Merchants Bank Co.Ltd(600036) and Ping An Bank Co.Ltd(000001) , which have developed rapidly in large retail business.
Risk warning: policy risk; The risk of macroeconomic recovery falling short of expectations; Covid-19 is at risk of continued deterioration.
