Key investment points:
Adhering to the main tone of “steady growth”, multi city banks across the country cut mortgage interest rates independently
On April 14, the central bank held a press conference on financial statistics for the first quarter of 2022, conveying the main tone of the previous two national standing committees. We should make timely and flexible use of a variety of monetary policy tools, give better play to the dual functions of aggregate and structure, and increase financial measures and efforts to support the real economy. The monetary policy adheres to the principle of “stability first and seeking progress while maintaining stability”. The prudent monetary policy is flexible and appropriate, and financial support for the real economy is increased. In the face of multiple pressures of economic downturn, we should timely use monetary policy tools such as RRR reduction. China’s epidemic has spread in many places, and some industries such as the service industry and small and micro enterprises have been seriously impacted. It is necessary to implement the detailed financial rescue policy, continue to make good use of policies such as inclusive small and micro loan support tools, refinancing and rediscount, fully support the rescue and development of difficult industries and small and micro enterprises, and stabilize the macro-economic market.
Recently, the real estate policy in many places has been relaxed and the mortgage interest rate has been reduced. Affected by the recent frequent outbreak of the epidemic, the decline in the income of some residents, the obstruction of real estate construction marketing activities and other factors, the sales of commercial housing declined, and the amount of individual housing loans also fell slightly. At the end of March, the balance of individual housing loans nationwide was 38.8 trillion yuan, a year-on-year increase of 8.9%, but the year-on-year growth rate of the balance decreased by 2.3 percentage points compared with the end of last year. Due to the weakening of market demand, banks in more than 100 cities across the country have independently lowered mortgage interest rates according to market changes and their own business conditions, with an average range of 20 to 60 basis points. Some provincial market interest rate pricing self-discipline mechanisms also cooperate with the regulatory requirements of local governments. According to the actual situation of the city and within the scope of national policies, the lower limit of the down payment proportion and the lower limit of interest rate of the city have been lowered to adapt to the characteristics of regional differences in the real estate market. The central bank adheres to the positioning of “houses are for living, not for speculation”, focusing on stabilizing land prices, house prices and expectations.
In addition, it gave a more detailed explanation on the establishment of two special refinancing loans for scientific and technological innovation and inclusive pension proposed by the previous national Standing Committee. The central bank guides financial institutions to further increase their support for scientific and technological innovation enterprises through scientific and technological innovation refinancing. The range of enterprises supported includes high-tech enterprises, “specialized and special new” small and medium-sized enterprises, national technological innovation demonstration enterprises, manufacturing single champion enterprises and other science and technology enterprises. The applicable banks of the tool include 21 national financial institutions such as the China Development Bank and the postal savings bank of China, with a total amount of 200 billion yuan and an interest rate of 1.75%. The direct mechanism of “loan first and then loan” is adopted. After financial institutions grant loans to enterprises, the people’s Bank of China will provide financial support at 60% of the principal for science and technology enterprises with a loan term of 6 months or more.
In the face of the rapid development of China’s aging population, the central bank guided financial institutions to provide preferential loans to inclusive elderly care institutions through special refinancing for inclusive elderly care, reduced the financing cost of elderly care institutions, and increased the supply of inclusive elderly care services for the general population. At the initial stage, five provinces including Zhejiang, Jiangsu, Henan, Hebei and Jiangxi were selected to carry out the pilot, with a pilot amount of 40 billion yuan and an interest rate of 1.75%. The pilot financial institutions are seven national large banks, including China Development Bank, export import bank, Industrial And Commercial Bank Of China Limited(601398) , Agricultural Bank Of China Limited(601288) , Bank Of China Limited(601988) , China Construction Bank Corporation(601939) , Bank Of Communications Co.Ltd(601328) . According to the principle of marketization, financial institutions issue preferential interest rate loans to the projects of inclusive elderly care institutions that meet the standards, and the loan interest rate is roughly the same as the market quotation interest rate (LPR) of loans of the same period and grade. The special refinancing adopts the direct mechanism of “loan first and then loan” and is issued quarterly. The people’s Bank of China provides special refinancing financial support for eligible loans in the same amount as the loan principal.
The European Central Bank kept the three key interest rates unchanged
The European Central Bank announced the latest interest rate resolution on the 14th. The main refinancing interest rate, marginal lending interest rate and deposit mechanism interest rate will remain unchanged at 0.00%, 0.25% and – 0.50% respectively, in line with market expectations. The scale of bond purchase under the conventional asset purchase plan in April will remain at 40 billion euros, and the scale of bond purchase in May and June will be reduced to 30 billion euros and 20 billion euros respectively. The bond purchase is expected to be completed in the third quarter of this year. The European Central Bank said that it would adjust the key interest rate of the euro zone within a period of time after the end of bond purchase, and it would be gradual. At the subsequent press conference, ECB president Lagarde said that affected by the conflict between Russia and Ukraine, energy prices and commodity prices continued to rise, the upward risk of inflation increased, and the downward risk of economic growth increased. Inflation in the eurozone soared to 7.5% in March and is expected to remain high in the coming months.
Financing funds
On April 13, the balance of A-share financing was 155434 billion yuan, a decrease of 5.123 billion yuan month on month; The balance of margin trading and securities lending was 1639005 billion yuan, a decrease of 5.901 billion yuan month on month. The balance of financing minus securities lending was 1463863 billion yuan, a month on month decrease of 4.345 billion yuan.
Land stock connect and Hong Kong stock connect
On April 13, the net purchase transaction of land stock connect on that day was -498 million yuan, including 45.001 billion yuan of purchase transaction and 45.499 billion yuan of sales transaction, with a cumulative net purchase transaction of 1610991 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $940 million on the same day, including a purchase transaction of HK $12.401 billion and a sale transaction of HK $11.461 billion, with a cumulative net purchase transaction of HK $2287773 billion.
Money market
On April 14, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 1.5520%, down 11.30bp, Shibor one week was 1.9050%, down 6.10bp. The weighted interest rate of pledged repo of deposit institutions was 1.5096% overnight, down 13.07bp and 1.8605% a week, down 5.45bp. The 10-year yield to maturity of China national debt was 2.7656%, up 0.25bp.
Overseas stock market
On April 14, the Dow Jones Industrial Average closed at 3445123 points, down 0.33%; The S & P 500 index closed at 439259 points, down 1.21%; The NASDAQ index closed at 1335108, down 2.14%. European stock markets, French CAC index closed at 658935 points, up 0.72%; Germany’s DAX index closed at 1416385 points, up 0.62%; The FTSE 100 index closed at 761638, up 0.47%. In the Asia Pacific market, the Nikkei index closed at 2717200, up 1.22%; The Hang Seng Index closed at 2151808, up 0.67%.
Foreign exchange rate
On April 14, the dollar index rose 0.47% to 1003252. The euro fell 0.58% against the dollar to 1.0829. The dollar rose 0.17% against the yen to 1258755. The pound fell 0.28% against the dollar to 1.3080. The spot exchange rate of RMB against the US dollar closed at 6.3704, depreciating by 0.08%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3893, depreciating by 0.18%. The central parity rate of RMB against the US dollar closed at 6.3540, up 0.33%.
Gold, crude oil
On April 14, Comex gold futures fell 0.21% to close at US $197710/oz. WTI crude oil futures rose 2.31% to close at US $106.05/barrel. Brent crude oil futures rose 2.55% to close at USD 111.66/barrel.
