Core view
In December 2021, the increase of credit and social finance was lower than expected, and the growth rate of social finance at the end of the year rebounded slightly to 10.3% from the bottom of the year. The pace of the early stage of credit relief was slow. The rebound of social finance growth in 2021 was only an apparent growth rate. We suggest that large-scale credit relief will focus on the "four arrows" credit relief in the first quarter of 2022, and it is expected that the credit will increase by 8.5 trillion in the first quarter, Social finance increased by 11.6 trillion, both of which were historical peaks. It is important to note that the near future is an important window period for interest rate reduction. The central bank will probably slightly reduce the policy interest rate by 5bp this week or next Monday. Therefore, the monetary policy in the first quarter will be wide credit + wide currency, corresponding to the steepening of the Treasury bond yield curve. For the equity market, the interest rate cut can moderately alleviate the downward pressure on industries related to the unstable growth chain, and we are still mainly optimistic about the opportunities of relevant sectors in the pro cyclical cycle. If the interest rate cut in January fails, there is still an interest rate cut window in mid February.
The year-on-year growth of credit was lower than expected, and the structure continued to deteriorate
In December 2021, RMB loans increased by 1.13 trillion, a year-on-year decrease of 123.4 billion yuan, lower than our forecast value of 1.3 trillion and wind's consensus expectation of 1.24 trillion, and the growth rate decreased by 0.1 percentage point to 11.6% compared with the previous value. The structure is still characterized by a sharp year-on-year increase in medium and long-term corporate loans and a significant year-on-year increase in bill financing. In addition, resident loans are also a drag on year-on-year. In December, medium and long-term loans of enterprises increased by 339.3 billion yuan, a year-on-year decrease of 210.7 billion yuan. The year-on-year decrease came from three reasons: ① in the fourth quarter of 2020, the actual year-on-year growth rate of GDP recorded a high of 6.5%, the economy was "overheated", the confidence of entity departments was strong, and the medium and long-term loans of enterprises increased significantly; ② At the end of 2021, the economy is facing downward pressure, and the willingness of capital expenditure of the real sector is still weak; ③ The impact of phased factors, that is, in December, the bank actively reserved high-quality projects for the first quarter of 2022 to achieve a "good start" at the beginning of the year, which echoed the bill data. In December, the bank's "bill reversal" phenomenon was prominent, the bill rediscount interest rate decreased sharply in the middle and late ten days, and the bill financing in the corresponding credit structure increased by 408.7 billion yuan, a new high since January 2019, An increase of 74.6 billion yuan over the same period last year. In addition, in December, short-term corporate loans decreased by 105.4 billion yuan, a year-on-year decrease of 204.3 billion yuan, which is also a positive support for the year-on-year change, mainly due to the low base in the same period of last year. In December, residents\' short-term, medium and long-term loans increased by 15.7 billion yuan and 355.8 billion yuan respectively, with a year-on-year decrease of 98.5 billion yuan and 83.4 billion yuan respectively. Residents\' short-term loans were affected by the repeated impact of the epidemic on consumption, and medium and long-term loans were still restricted by the low real estate sales.
The growth rate of social finance picked up slightly, and the credit extension was relatively slow during the year
In December, the increment of social financing scale was 2.37 trillion, an increase of 720.6 billion yuan year-on-year, which was lower than our forecast value of 2.8 trillion and wind's consensus expectation of 2.43 trillion. The growth rate increased slightly by 0.2 percentage points to 10.3%. At the initial stage of broad credit, the pace was slow. Structurally, except for the small year-on-year increase of credit projects, other projects have achieved year-on-year increase, and the projects with greater support are government bonds, corporate bonds and stock financing. In December, RMB loans increased by 1.03 trillion yuan, a year-on-year decrease of 111.2 billion yuan, which is the main drag on the year-on-year change of social finance. Government bonds increased by RMB 1171.8 billion, with a year-on-year increase of RMB 459.2 billion. The issuance of government bonds lagged behind in 2021, with a large year-on-year increase at the end of the year; In November 2020, Yongmei's default event impacted the net financing of corporate bonds, and the data in December was only 43.6 billion yuan. In December 2021, corporate bond financing increased by 222.5 billion yuan, an increase of 178.9 billion yuan year-on-year. In December, the financing of undiscounted bills was - 141.8 billion yuan, which was still negative, mainly due to the economic downturn, the reduction of trade activities and the continuous increase of discount volume. However, due to the squeeze of bill projects in the same period in 2020, the project achieved a year-on-year increase. Entrusted loans and trust loans decreased by 41.6 billion yuan and 458 billion yuan respectively, and decreased by 14.3 billion yuan and 4 billion yuan respectively, which is basically in line with our expectations. Among them, we continue to remind that the trust loans or significantly less increase are mainly due to the large amount due in December, while the entrusted loans are generally stable.
M2 growth rate rebounded sharply, and M1 growth rate continued to rebound
At the end of November, M2 growth increased significantly by 0.5 percentage points to 9%, which was completely consistent with our forecast, higher than the 8.7% expected by wind. In December, the relatively stable credit supply and the acceleration of government expenditure pushed up M2 growth, especially the reduction of reserve requirement and the low over storage rate may continue to be reflected as a higher currency multiplier. The year-on-year growth rate of M1 continued to rebound by 0.5 percentage points to 3.5%, which is close to our forecast value of 3.8%. We believe that factors such as the lower base last year, the correction of real estate policies and the improvement of the activity of urban investment platform have positive support for M1 data. In December, the year-on-year growth rate of M0 increased by 0.5 percentage points to 7.7%. We believe that the rise of data in recent three months is related to the structural imbalance under the increasing downward pressure on the economy, and the economy in some low growth areas is facing relatively greater growth pressure.
There is a high probability of short-term interest rate reduction. In the first quarter, we focused on large-scale credit easing
In December, the credit and social finance data again showed lower than expected performance. The growth rate of social finance closed at 10.3%, rebounding 0.3 percentage points from the low point of the year, with a small range. Credit is still supported by bills. Social finance mainly depends on government bonds, corporate bonds and other projects to achieve a year-on-year increase. On the whole, the rebound of social finance growth in 2021 is only an apparent growth rate, We suggest that in the first quarter of 2022, "four arrows" credit relief: manufacturing loans, carbon reduction loans, infrastructure loans, mortgage loans, and large-scale credit relief is being opened. In November and mid December, the PMI of the mining and manufacturing industry rebounded continuously, and the forward-looking signals of economic recovery and policy support have appeared, indicating that the medium and long-term credit of enterprises is expected to be in large volume in the first quarter of 2022. In addition, the core of our optimism about credit release comes from the current high currency multiplier. As of November 2021, China's currency multiplier was 7.41, which is in the highest position range, It shows that the bank's willingness to extend credit is still strong, which also means that the economy is highly dependent on the leverage level. In the wide credit environment, the credit release speed is faster, and its positive pull on the economy will be stronger, which will help the economy stabilize rapidly in the short term. We expect that in the first quarter, credit increased by 8.5 trillion and social finance increased by 11.6 trillion, both of which are historical peaks. The total amount of credit will not only rise, but also the structure will be optimized, so as to stimulate economic repair and rise.
In addition, we highlight that the near future is an important window period for interest rate reduction. Since the beginning of January, the dr007 center has been below 2.2% for seven consecutive trading days, and the forward-looking signal of interest rate reduction has appeared. The form of interest rate reduction may be one of the following two: ① on January 17 (next Monday), the reverse repurchase and MLF interest rates will be reduced by 5bp simultaneously, and the one-year and five-year LPR will be reduced by 5bp on January 20. ② On January 14 (this Friday), the reverse repo interest rate was reduced by 5bp, the MLF interest rate was reduced by 5bp on January 17, and the one-year and five-year LPR were reduced by 5bp on January 20. The former is more likely. If the interest rate cut is implemented, the monetary policy will be characterized by wide credit + wide currency, long-end interest rate or more attention to wide credit. The yield of 10-year Treasury bonds will enter a reverse upward process, and the high point in the first quarter is expected to rise to around 3.2%. However, the interest rate cut will guide the yield of 1-year treasury bonds downward, so it will promote the steepening of the yield curve of treasury bonds. For the equity market, the interest rate cut can moderately alleviate the downward pressure on industries related to the unstable growth chain, and we are still mainly optimistic about the opportunities of relevant sectors in the pro cyclical cycle. If the interest rate cut in January fails, there is still an interest rate cut window in mid February.
Risk tip: the Fed's tightening policy is more than expected or the upward pressure on prices is more than expected, disturbing China's easing rhythm.
