Key investment points:
Premier Li Keqiang presided over the executive meeting of the State Council
Premier Li Keqiang chaired an executive meeting of the State Council to deploy measures to further improve agricultural production in spring to ensure a bumper harvest of grain and a stable supply of important Shenzhen Agricultural Products Group Co.Ltd(000061) crops. The meeting pointed out that stabilizing employment and price stability are the main support for maintaining economic operation within a reasonable range. Stabilizing grain and other important Shenzhen Agricultural Products Group Co.Ltd(000061) production and supply plays a ballast role in maintaining overall economic and social stability, especially stabilizing prices and ensuring people’s livelihood. It is particularly important in the current situation of increasing uncertainty in the international grain market and high inflation in some countries. China has sufficient food supply and reserves. Spring sowing has been carried out steadily this year, and food security is guaranteed.
The meeting identified measures to ensure and increase energy supply and improve the guarantee capacity of energy for economic and social development. We should give full play to the role of coal as the main energy, and increase coal production capacity by 300 million tons this year through nuclear production, expansion and new production; Using market-oriented and legal methods to guide coal prices to operate within a reasonable range; Promote the transformation of energy conservation and emission reduction, flexibility and heating of coal-fired power units, and the transformation scale exceeded 220 million kW in the whole year. Nuclear power should be developed in an orderly manner on the premise of strict supervision and ensuring absolute safety. After years of preparation and comprehensive evaluation and review, three new nuclear power unit projects in Sanmen, Zhejiang, Haiyang, Shandong and Lufeng, Guangdong have been approved.
Overall, the meeting put forward requirements for agricultural production, stable supply of Shenzhen Agricultural Products Group Co.Ltd(000061) and stable price of energy. Guide price stability and coal prices to operate within a reasonable range.
The central bank and the China Banking and Insurance Regulatory Commission jointly held a symposium on financial support for the real economy
On April 20, the central bank and the China Banking and Insurance Regulatory Commission jointly held a symposium on financial support for the real economy, paid close attention to the implementation of various recent financial policies, increased financial support for epidemic prevention and control and economic and social development, ensured smooth logistics and promoted the circulation of industrial chain supply chain.
The meeting pointed out that we should make good use of all financial policies and take the initiative to serve the real economy. All financial institutions should focus on key support areas such as contact service industry, small and micro distressed subjects, freight logistics and investment and consumption, strengthen financial services for key consumption, new citizens and effective investment, and timely introduce supporting measures in terms of credit resource allocation, internal assessment and transfer pricing. We should give full play to the effectiveness of a number of structural monetary policy tools, do a good job in the connection between government, bank and enterprise, and release policy dividends as soon as possible. We should balance the relationship between supporting epidemic prevention and control, supporting the real economy and preventing risks, and improve the sustainability of policies and the effect of publicity.
The meeting stressed that financial institutions should adhere to the positioning that houses are used for living, not for speculation, implement differentiated housing credit policies due to urban policies, and better meet the reasonable housing needs of home buyers. The real estate financing system should be carefully and orderly, and the real estate financing system should be carefully distinguished from that of the enterprise group. In accordance with the principles of marketization and rule of law, we should do a good job in the financial services of mergers and acquisitions of risk disposal projects of key real estate enterprises. We should timely optimize credit policies and flexibly adjust the repayment plans of individual housing loans for people affected by the epidemic.
In general, under the background of the epidemic, the meeting should still focus on consumption, freight logistics and small and micro enterprises in distress, and use a variety of financial instruments to provide support for the allocation of credit resources and support the real economy. For real estate, it is emphasized again that real estate is not fried, which corresponds to yesterday’s distribution, and the five-year LPR in April remains unchanged.
LPR stood still in April
The central bank released the LPR quotation in April: the one-year LPR was reported at 3.70%, and the varieties over five years were reported at 4.60%, both unchanged from the previous period. It is also LPR’s “Inaction” for three consecutive months.
Yesterday, we recalled that in the same month of MLF in history, the RRR has been reduced for eight times, and the five-year LPR has stood still every time, while the one-year LPR has remained unchanged for six times, decreased twice, and the two times are more than two years apart (September 2019 and December 2021). The day before yesterday, we mentioned that there was still a certain probability of cutting interest rates, and yesterday’s expectation of cutting interest rates failed. From the perspective of probability, the quotation of this month also conforms to the historical law. In the evening, the RMB exchange rate continued to depreciate. In the follow-up, we believe that with the opening of the interest rate hike cycle in the United States and the continued strength of the US dollar, although China’s monetary policy is still “dominated by me”, the inversion range of the 10-year interest rate difference between China and the United States continues to expand. In the follow-up, China may still face some capital outflow pressure, and the month on month change of foreign capital holding Chinese bonds also shows a net outflow in recent two months. Superimposed exports may tend to slow down in the future this year. We think there may still be slight depreciation pressure on the RMB in the future.
The financing balance decreased. On April 19, the balance of A-share financing was 154006 billion yuan, a decrease of 948 million yuan month on month; The balance of margin trading was 1627922 billion yuan, a decrease of 1.653 billion yuan month on month. The balance of financing minus securities lending was 1452199 billion yuan, down 241 million yuan month on month.
Net sales of funds to the north. On April 20, the net purchase transaction of land stock connect on that day was -5.288 billion yuan, including 45.186 billion yuan of purchase transaction and 50.474 billion yuan of sales transaction, with a cumulative net purchase transaction of 1603760 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $1.822 billion on the same day, including a purchase transaction of HK $9.494 billion and a sale transaction of HK $11.317 billion, with a cumulative net purchase transaction of HK $2288947 billion.
Money market interest rates generally closed higher. On April 20, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 1.3030%, up 0.90bp, Shibor one week was 1.9370%, up 13.60bp. The weighted interest rate of pledged repo of deposit institutions was 1.3028% overnight, up 0.81bp and 1.7857% a week, up 5.00bp. The 10-year yield to maturity of China national debt was 2.8330%, up 1.22bp.
U.S. stocks rose and fell, while European stocks rose. On April 20, the Dow Jones Industrial Average closed at 3516079 points, up 0.71%; The S & P 500 index closed at 445945 points, down 0.06%; The NASDAQ index closed at 1345307, down 1.22%. European stock markets, French CAC index closed at 662491 points, up 1.38%; Germany’s DAX index closed at 1436203 points, up 1.47%; The FTSE 100 index closed at 762922, up 0.37%. In the Asia Pacific market, the Nikkei index closed at 2682743 points, up 0.65%; The Hang Seng Index closed at 2094467, down 0.40%.
The dollar index rose. On April 20, the dollar index fell 0.68% to 1 Guangdong Sanhe Pile Co.Ltd(003037) . The euro rose 0.63% against the dollar to 1.0855. The dollar fell 0.78% against the yen to 1278920. The pound rose 0.54 per cent against the dollar to 1.3069. The spot exchange rate of RMB against the US dollar closed at 6.4153, depreciating by 0.59%. The spot exchange rate of offshore RMB against the US dollar closed at 6.4450, depreciating by 0.41%. The central parity rate of RMB against the US dollar closed at 6.3996, depreciating by 0.43%.
Gold rose and crude oil fluctuated slightly. On April 20, Comex gold futures rose 0.40% to close at US $196010/oz. WTI crude oil futures rose 0.05% to close at US $102.45/barrel. Brent crude oil futures fell 0.34% to close at US $107.23/barrel. COMEX copper futures fell 0.23% to close at US $4.6870/lb. LME copper three-month futures fell 0.76% to close at US $10245 / ton.
