Credit demand eased more than expected, and credit and social finance basically made a good start. Although the epidemic has a great impact on Shanghai and Shenzhen, there has not been much interference in credit demand, and the loans of enterprises and institutions and residents have rebounded significantly. At the same time, with the superposition of local government debt, social finance also increased more than expected. However, at present, corporate loans still play a leading role, the amount of bills is still high, and there is still a rhythm characteristic of low in the front and high in the back every month. Under the condition that the disturbing factors of the epidemic still exist and the real estate sales are weak, it is expected that the medium and long-term loans of residents will continue to be weak. Combined with the documents of the regular session of the United Nations, we believe that the possibility of reducing interest rates this month is low, and we do not rule out the possibility that the central bank will speed up the research on market-oriented means and reduce the real financing cost through other ways.
The impact of the epidemic on credit in March was limited, and the new RMB loans improved more than expected, exceeding the highest level in the same period in recent five years. In the first quarter, RMB loans increased by 8.34 trillion yuan, a year-on-year increase, and the scale increased significantly compared with last year, reaching 663.6 billion yuan. The main reason why this month's credit data exceeded expectations is that the market overestimated the impact of the epidemic on credit. From the proportion of loan balance in 2021, the proportion of loans in Shanghai and Shenzhen was about 9.75%. However, with the strong support of the demand for public credit, the loans of enterprises and institutions of all terms rebounded well, and the new RMB loans in March reached the highest in the same period of nearly five years. At the same time, the scale of household loans also improved significantly. In March, household loans increased by more than 100 billion yuan to 753.9 billion yuan. With the support of the recovery of real estate sales scale in second tier cities, the medium and long-term loans of households recovered rapidly compared with the previous month, reaching 373.5 billion yuan.
Credit and local government debt support social finance grew more than expected in March, and the gap between M2 and the growth rate of social finance scale narrowed year-on-year. The increment of social financing scale in the first quarter was 1.77 trillion yuan more than that in the same period of last year, far exceeding market expectations. On the basis of the higher than expected increase in credit scale, the scale of various direct financing increased in March. Among them, government debt is another major factor in the higher than expected growth of social finance, mainly due to the increase in the custody scale of local government debt, which is about 608.3 billion yuan. At the same time, bond financing and stock financing also increased in March compared with last month and the same period last year. On the other hand, in addition to the central bank's increase in open market operations at the end of March and a significant reduction in cash recovery, the acceleration of fiscal expenditure in March also played a certain role in M2 growth, supporting the year-on-year increase of M2 by 0.5 percentage points to 9.7%. According to the issuance plans announced by 18 local governments recently, the issuance scale of local government debt plans in the second quarter has reached 711.8 billion yuan, which is expected to continue to support social finance.
The margin of credit demand improved, and the bill to discount interest rate rebounded compared with the previous period. From the perspective of credit data, the credit demand of enterprises, institutions and households improved in March, and the proportion of medium and long-term loans rose sharply by 18 percentage points to 55%. In March, the bill to discount interest rate rebounded compared with the previous period, and the interest margin with the inter-bank certificate of deposit interest rate returned to the positive range at the end of March. It can be seen that the phenomenon of Bank Bill writing at the end of the month has eased, and the marginal improvement of credit demand has occurred. Meanwhile, according to the results of the central bank's questionnaire, the central bank's loan demand index rose by 4.6 percentage points to 72.3% in the first quarter driven by the demand for infrastructure loans. However, it should also be noted that although the loan demand has increased, it is still weak compared with the same period last year, and although the loan demand of real estate enterprises has increased, it is still at a low level of 47.2%.
Structural problems remain. In March, the rhythm of loan issuance still had the characteristics of high before and low after. Enterprises and institutions still played a leading role, and short-term financing and bill financing increased by 905.3 billion yuan year-on-year. Although the new loans of residents have rebounded compared with last month, they are still weak, and the year-on-year growth has eased, but they are still at a low level of - 394 billion yuan. According to the all union real estate chamber of Commerce, the sales area of commercial housing in China increased by 27.1% month on month in March, but still decreased by 47.6% year-on-year. At present, the trading volume of second tier cities has improved, but the first tier and third and fourth tier cities are still weak, which may drag down the medium and long-term loans of residents to continue to weaken.
According to the recent statements in the documents of the central bank and the national standing committee, we believe that the possibility of reducing interest rates this month is low. The central bank may continue to support the development of the real economy through structural monetary policy. It does not rule out the possibility of the central bank accelerating the research on market-oriented means and reducing the real financing cost through other ways. After the Federal Reserve released the minutes of the interest rate meeting, the view of accelerating the contraction of the table prompted the interest rate of 10-year US bonds to rise rapidly, which is now close to 2.8%. At the same time, according to the statement of the Federal Reserve's voting Committee, it is expected that the interest rate will be increased by 50bp at the interest rate meeting in May and June, and by 25bp at the next four meetings, and the neutral interest rate will reach 2.5% at the end of the year. Therefore, the possibility of China reducing policy interest rates during the year has been greatly reduced. Broaden our thinking. We believe that in addition to increasing the amount of open market operations and making good use of refinancing policies, it is also possible for the central bank to introduce market-oriented interest rate policies to reduce the cost of bank funds.
Risk tips: geopolitical risks exceeded expectations, the Fed tightened beyond expectations, and the spread of the epidemic exceeded expectations
