Event:
On April 11, the central bank released financial data for March 2022. In March, M2 increased by 9.7% year-on-year, 0.5pct higher than the previous month and 0.3pct higher than the same period last year; The scale of social financing increased by 4.65 trillion yuan, an increase of 1.27 trillion yuan over the same period last year; The stock of social finance increased by 10.6% year-on-year and 0.4pct month on month.
Aggregate demand remains the key to the problem
The social finance data in March is very similar to that in January, showing the characteristics of strong aggregate and weak structure. The continuous deviation between the total amount and structure, on the one hand, is in line with the historical experience of the early stage of credit relief, which is a sign of policy initiative and entity passivity. On the other hand, it also reflects the determination of policy credit relief again.
The weak structure shows that the demand for active financing is still insufficient.
In March, social finance increased by 4.65 trillion yuan, close to the same period in 2020, an increase of 1.27 trillion yuan over the same period last year, significantly exceeding the market's previous expectations.
Weak overall structure and insufficient demand for active financing are still the main characteristics of the credit side this month. From three perspectives:
1) RMB loans invested in entities increased by 481.7 billion yuan, but the increase was still mainly contributed by short-term loans and bill financing, and medium and long-term loans still decreased by 235.6 billion yuan year-on-year. In March, short-term loan bills accounted for 48.3% of the new RMB credit, up about 14 PCT month on month compared with February, which is close to the level of the same period in 2019 and 2020. The growth pressure in March 2020 is also relatively stable.
2) in the medium and long term, although residents have significantly rebounded compared with February, it is still the lowest value in the same period in recent five years, which is basically close to March 2018, far lower than the same period in 20192021, and an increase of about 250 billion yuan less than March 2021, indicating that the current willingness of residents to buy houses is still weak, which is basically consistent with the real estate sales data in March. However, it should be noted that the epidemic occurred successively in Shenzhen and Shanghai in March, which caused objective obstacles to residents' house purchase, and may also be one of the reasons for the limited recovery of residents' medium and long-term loans.
3) in social finance, RMB loans contributed 38% of the year-on-year increase and government debt contributed 31%, accounting for nearly 70% in total. Considering that the credit structure in March is still short, in fact, the total amount of social finance exceeding expectations in March is still not the result of active financing by the real sector. In April, due to the gap between the early approval of local bonds and the formal batch in the connection of issuance, the government bond financing is likely to fall seasonally, and the supporting effect on social finance may be weakened at that time.
However, there are two highlights in credit.
On the one hand, although the proportion of short-term loan bills remains high, there are signs of improvement in medium and long-term loans of enterprises. In March, the medium and long-term loans of new enterprises were 1.34 trillion yuan, the scale was the same as that in 2021 and slightly more, with an increase of about 840 billion yuan month on month compared with February. The month on month recovery rate significantly exceeded the seasonal law, indicating that the investment and financing demand of enterprises has begun to improve marginally. In terms of industry, as the real estate sales are still bottoming out and the debt risk of some real estate enterprises is still expanding, we believe that infrastructure may be the main investment field of medium and long-term corporate loans in March.
On the other hand, there has been a slight positive growth in non-standard financing. The three items off the balance sheet increased by 13.3 billion yuan, an increase of 412.9 billion yuan compared with the same period in 2021, and the rebound trend is close to 2019 and 2020. From the historical experience, if the non-standard financing can be continuously improved, it will undoubtedly be beneficial to the credit.
The separation between resident deposits and fiscal deposits points to the differentiation of expenditure willingness.
In terms of deposits, this month mainly focuses on the changes of residents' deposits and fiscal deposits.
In March, household deposits increased by 2.7 trillion yuan, an increase of 762.3 billion yuan year-on-year and nearly 3 trillion yuan month on month, which is very different from the seasonal law of marginal decline in March. The super seasonal rise of residents' deposits reflects the obvious weakening of residents' willingness to spend. On the one hand, from the perspective of the year-on-year decrease of RMB 304 billion in non bank deposits in March, the substantial adjustment of the capital market in March triggered a large number of redemptions of asset management products by residents, which showed the phenomenon of "moving" from non bank to residents on the deposit side. On the other hand, the repeated epidemic and the weakening of residents' expectations of the real estate market have also suppressed residents' willingness to consume and invest. According to the questionnaire survey of the central bank in the first quarter, the proportion willing to save more increased by 2.9pct compared with the fourth quarter of last year, while the proportion of more consumption and more investment decreased by 1.0 and 1.9pct respectively.
The performance of fiscal deposits is on the contrary to that of residents' deposits. The net decrease in March was 842.5 billion yuan, an increase of 357.1 billion yuan year-on-year, which is the embodiment of the positive pre force of fiscal policy. Insufficient aggregate demand is the main feature of the initial stage of steady growth, especially this year. At this time, fiscal policy needs to make greater efforts to hedge it. Premier Li Keqiang proposed at today's Symposium of the main heads of some local governments on the economic situation that "we should make a big landing in the first half of the year and form more physical workload". We expect that fiscal expenditure will still show an accelerating trend in the first half of the year to hedge the decline of total demand.
In addition, M2 recorded a year-on-year increase of 9.7%, an increase of 0.5pct, while M1 recorded a year-on-year increase of 4.7%, which was the same as that of the previous month, resulting in the widening of m2-m1 scissors difference by 0.5pct, indicating that the activation degree of funds has not been significantly improved.
Investment strategy: not pessimistic in the short term, but cautious in the medium term.
The signal given by the social finance data in March is basically consistent with the concerns prompted in our weekly thinking on "disappeared borrowers and the rope pushing stones". At present, the key crux of stable growth and wide credit lies in the lack of financing demand. In particular, the over seasonal increase of residents' deposits and the emergence of medium and long-term loans that are still weak confirm that there are obvious deficiencies in the current total demand.
When the impediment of credit easing is on the demand side rather than the supply side, monetary policy can do very limited things. We believe that at present, we should appropriately reduce the expectation of further monetary easing, especially the expectation of reducing reserve requirements and interest rates. Further monetary easing should at least wait until the financing demand is repaired, so as to give full play to the effect of monetary policy.
On the premise that the goal of steady growth remains firm, the expectation for policies should be aimed at the tools that can "push the stone" - industrial policy and fiscal policy. Pay attention to the changes of purchase and sale restriction policies in core second tier cities, as well as the possibility of relaxing urban investment and financing policies and issuing special treasury bonds.
For interest rate bonds, considering that the impact of this round of epidemic may run through the whole April, we continue to maintain the view of "short, long and short". In the short term, there is no inflection point in the fundamentals. The social finance data show that the financing demand is still weak, and there will be less obvious pressure on the interest rate. At the same time, the market's expected game on wide currency will continue the previous shock style of interest rate. It is suggested to continue to grasp the space for thickening income such as leverage arbitrage, strengthened trading and dumbbell combination. In the medium term, before seeing the signal of weakening the steady growth target, the medium and long-term bad still exists. The bond market needs to have defensive thinking. It is suggested to allocate funds and wait for the allocation opportunity after the bad release while maintaining a short period of time.
Risk tips
The development of overseas geopolitical events exceeded expectations; The epidemic situation is repeated and uncertain.
