Core view
In March 2022, the credit and social finance data significantly exceeded the consensus expectations of the market, but were basically consistent with our forecast value. The view of "four arrows at the same time" wide credit in the first quarter that we continued to emphasize was fully verified. The credit volume in March was consistent with the logic in January, that is, the marketing activities of stock loan projects in the credit month were more active, and the excess continuation scale of stock loan projects was large. We suggest that in the credit structure, although the year-on-year increase is mainly supported by enterprise short-term loans and bill financing, under the high base in March last year, enterprise medium and long-term loans can still achieve year-on-year increase, which is also strong. We expect that the follow-up monetary policy will take steady growth as the primary goal, maintain a stable and slightly loose policy tone, and focus on credit. Recently, there have been many outbreaks in China, which has exacerbated the uncertainty of fundamentals, and there is still the probability of reducing the reserve requirement in the second quarter. For the follow-up credit release, it is expected that the year-on-year increase of credit in each month in the future may be difficult to exceed that in January and March, but the annual trend of credit and social finance growth will continue to fluctuate upward, maintaining the judgment that the annual credit growth rate is 12% (corresponding to the new credit scale of 23 trillion) and social finance growth rate is 11.2%. July is the annual high of social finance growth rate, and the overall high level fluctuates in the third and fourth quarters. Financial data superimposed more than expected. We expect that the actual year-on-year growth rate of GDP in the first quarter may reach 5.4%. The equity market is still optimistic about the pro cyclical sector. Under the combination of "wide currency + wide credit" of monetary policy, the yield of 10-year Treasury bonds is expected to reach a high of 3% in the second quarter.
In March, credit increased by 3.13 trillion, higher than the consensus expectation of the market and in line with our expectation
In March 2022, RMB loans increased by 3.13 trillion yuan, an increase of 395.1 billion yuan year-on-year (an increase of 8.34 trillion yuan in the first quarter, an increase of 663.6 billion yuan year-on-year). The credit data in March was higher than wind's consensus expectation of 2.6 trillion yuan, but it was close to our forecast of 3.1 trillion yuan. The credit growth rate in March remained at 11.4% before the level. In the interpretation of financial data in February, we mainly pointed out that "there are seasonal and temporary factors disturbing the data in February. The credit structure should not only look at the trend of one month, but also need to lengthen the time dimension. We believe that the" four arrows "wide credit in the first quarter will continue, and the high performance of credit and social finance will be paid attention to in the big month at the end of the quarter in March". The current view has been fully realized. The logic of credit volume in March is consistent with that in January, that is, the marketing activities of stock loan projects in the credit month are more active, and the scale of excess continuation of stock loan projects is large.
In terms of structure, the year-on-year increase in credit in March was mainly supported by the enterprise side, while the resident side was a major drag. In March, the enterprise loan increased by 2.48 trillion yuan, an increase of 880 billion yuan year-on-year. Among them, the enterprise short-term loan and bill financing increased by 808.9 billion yuan and 318.7 billion yuan respectively, an increase of 434.1 billion yuan and 471.2 billion yuan year-on-year, which was the main source of the year-on-year increase. The medium and long-term loan of enterprises increased by 1.34 trillion yuan, a slight increase of 14.8 billion yuan year-on-. Affected by the epidemic, the increase in enterprise short-term loans and bill financing is in line with the needs of enterprise short-term financing, which is reasonable. However, we suggest that the year-on-year increase in bill financing also comes from the low base in March last year.
At the same time, we believe that the medium and long-term loans of enterprises were also strong in March this year. In the "overheated economy" environment at the beginning of last year, the demand for credit in the real sector was strong, but the central bank officially opened the "tight credit" since March, and the overall credit line of banks was limited. The strategy adopted was to invest the limited credit line in medium and long-term loans to enterprises with higher interest rates, thus squeezing bill financing (bill financing was - 152.5 billion yuan in March last year). In March this year, under the condition of high base last year, The medium and long-term loans of enterprises can still increase year-on-year. We believe that the credit structure is still good, thanks to the central bank's broad credit tone and the active investment of banks. Structurally, major projects, manufacturing, green carbon reduction, private microenterprises, strategic emerging industries and urban renewal are all important credit carriers. The market had been worried about the impact of the epidemic on credit, but we suggested in the forecast report at the end of March that during the epidemic in March, financial institutions have increased regional targeted credit support to increase credit for anti epidemic enterprises and relevant private, small and micro enterprises. On March 30, Shanghai Branch of the people's Bank of China said that financial institutions should not blindly limit, withdraw, cut off and suppress loans, so there is no need to be too pessimistic about enterprise credit.
In March, residents' loans increased by 753.9 billion yuan, a year-on-year decrease of 394 billion yuan, of which short-term and medium and long-term loans increased by 384.8 billion yuan and 373.5 billion yuan respectively, a year-on-year decrease of 139.4 billion yuan and 250.4 billion yuan. Affected by the epidemic, residents' consumption and commercial housing sales have been affected to varying degrees. We believe that with the gradual improvement of the epidemic situation, residents' credit supply is expected to improve month on month. In March, non bank loans decreased by 45.4 billion yuan, which is in line with the seasonality. In the big month of credit, banks tend to be relatively cautious in lending funds to non bank, which also leads to a larger increase in social finance loans than RMB loans.
In March, social finance increased by 4.65 trillion, higher than the consensus expectation of the market and in line with our expectation
In March, the increment of social financing scale was 4.65 trillion (an increase of 1.28 trillion year-on-year), which was higher than the 3.6 trillion unanimously expected by wind, but it was close to our forecast of 4.5 trillion, and the growth rate increased significantly by 0.4 percentage points to 10.6%. Structurally, RMB loans with social finance caliber increased by 3.23 trillion, an increase of 481.7 billion yuan year-on-year. In addition to credit, the year-on-year increase was mainly from government bonds, undiscounted bills and trust loans, which was completely consistent with our prediction. In March, government bonds increased by 705.2 billion yuan, an increase of 392.1 billion yuan year-on-year. The government made efforts ahead of schedule, and the issuance of special bonds was fast; In March, undiscounted bills increased by 28.6 billion yuan, a year-on-year increase of 258.2 billion yuan. As the economy warmed up, the total scale of bills rebounded, and the posted cash volume weakened in the latter ten days, resulting in the recovery of off balance sheet bill data; In March, trust loans decreased by 25.9 billion yuan, a year-on-year decrease of 153.2 billion yuan. In 2022, the supervision of financing trust continued, its net financing scale will remain negative, and the total amount will continue to drop, but it will maintain a decrease year-on-year. In March, corporate bond financing increased by 389.4 billion yuan (an increase of 8.7 billion yuan year-on-year), benefiting from the improvement of credit environment and the decline of interest rate; Equity financing increased by 95.8 billion yuan (an increase of 17.5 billion yuan year-on-year); Entrusted loans increased by 10.6 billion yuan (an increase of 14.8 billion yuan year-on-year), showing a stable performance. 20182019 is the main time period for the decline of entrusted loans. With the gradual standardization of the industry, this data is expected to gradually stabilize in the future, and the annual probability will decrease year-on-year in 2022.
M2 growth picked up and M1 growth was flat, in line with expectations. At the end of March, M2 growth rose sharply by 0.5 percentage points to 9.7%, the previous value was 9.2%, wind unanimously expected 9.1%, and our forecast value was 9.4%. In addition, in the deposit structure, the deposits of residents and enterprises increased by 2.7 trillion and 2.65 trillion respectively in March, an increase of 762.3 and 922.1 billion yuan year-on-year, while the fiscal deposits decreased by 842.5 billion yuan, an increase of 357.1 billion yuan year-on-year. The year-on-year decrease of fiscal deposits is also the reason for the significant upward growth of M2. With the accelerated issuance of government bonds in March, It reflects that the expenditure at the beginning of the fiscal year is relatively positive, and the mapping infrastructure investment may maintain strong resilience.
At the end of March, the growth rate of M1 was flat, and the previous value was 4.7%, which was close to our forecast value of 4.3%. The steady growth rate of M1 echoed the year-on-year increase in short-term loans of enterprises. Although the economic activity of real estate sales and real estate sectors weakened due to the impact of the epidemic, the short-term credit supply was sufficient and demand deposits were supported. We expect this logic to continue in April, and with the decline of the base, the growth rate of M1 is expected to rebound significantly in April.
At the end of March, the year-on-year growth rate of M0 was 9.9% and the previous value was 5.8%. The data rebound was not seasonal, which was mainly affected by the epidemic. The higher M0 growth rate was consistent with the data during and after the epidemic in 2020. The epidemic hit small and medium-sized entities, the economic structure was unbalanced, and the demand for money increased, resulting in the higher M0 growth rate. It is expected that the data will naturally fall as the impact of the epidemic eases.
It is expected that the central bank will still have the probability of reducing the reserve requirement in the second quarter
We continue to emphasize that the "four arrows" (manufacturing loans, carbon reduction loans, infrastructure loans and mortgage loans) in the first quarter has been fulfilled. We believe that the current monetary policy still takes steady growth as the primary goal and maintains a stable and slightly loose policy tone. Recently, there have been many epidemics in China, and there have been many concentrated epidemics in the country. It is the largest local outbreak since the Wuhan epidemic. The epidemic has exacerbated the uncertainty of fundamentals. On April 6, the national Standing Committee proposed that "there have been many epidemics in China recently, and the difficulties of market players have increased significantly", "We should make timely and flexible use of various monetary policy tools such as refinancing, give better play to the dual functions of aggregate and structure, and increase support for the real economy". We believe that the follow-up monetary policy will still take multiple measures to stabilize growth, and there is more room for loose policy tools. "Expanding the scale of new loans" appeared in the government work report for the first time, reflecting the determination of the policy level to stabilize credit and credit. It is expected that the focus of monetary policy is still credit. Credit is the most effective means to broaden credit and an effective way to promote enterprises to expand capital expenditure and prevent financial idling. There is still a probability of reducing the reserve requirement in the second quarter.
For the follow-up credit release, we expect the credit intensity in the second quarter to be weaker than that in the first quarter, and the year-on-year increase of credit in the subsequent months may be difficult to exceed that in January and March. On the one hand, the follow-up or natural weakening of the marketing activities of stock loan projects in January and March; On the other hand, after the financial data in the first quarter had a good start, there may be some overdrafts in subsequent months from the perspective of the annual credit arrangement. However, in terms of the growth trend of the whole year, it is expected that the growth rate of credit and social finance will continue to fluctuate upward, maintaining the judgment that the annual credit growth rate is 12% (corresponding to the new credit scale of 23 trillion) and the growth rate of social finance is 11.2%. July is the annual high point of the growth rate of social finance, and the overall high level in the third and fourth quarters fluctuated and fell slightly.
We are also reminded to pay attention to the "good start" of the economy in the first quarter. It is expected that the actual year-on-year growth rate of GDP in the first quarter will reach 5.4%. The financial data is strong and the probability of economic fundamentals data is higher than expected. The equity market is still optimistic about the pro cyclical sector. Under the combination of "wide money + wide credit" of monetary policy, the yield of 10-year Treasury bonds is expected to be near 3% in the second quarter.
Risk tip: the international balance of payments entered the observation period in the second quarter. If the interest rate difference between China and the United States is further reversed sharply, it will trigger a negative cycle of large-scale capital outflow and exchange rate depreciation. Monetary policy may focus on the balance of payments.
