Core view:
Guoxin bank’s view: since March, the disturbance of the epidemic has had a great impact on the economy. In mid and late March, financial institutions increased their support for the real economy, and the credit supply was at a high level in March. In April, the support policies to deal with the epidemic continued, but the strength decreased, and the epidemic had a great impact on the real economy and weakened credit demand. Therefore, we expect the credit supply (plus write off and ABS) to be 1.43 trillion yuan in April, which fell significantly month on month. However, considering the low base brought by regulatory factors in the same period last year, it still increased by about 85.2 billion yuan year-on-year. Structurally, the bill discount rate decreased significantly in late April, which also reflects the poor financing demand of the real economy. Therefore, it is expected that short-term loans and bills will still increase year-on-year, continuing the trend of short-term financing impulse since the beginning of the year.
In April 2021, affected by regulatory policies and other factors, the new social finance and M2 were at a low level. Under the influence of low base, the predicted growth rate of social finance and M2 in April 2022 was 10.6% and 10.4%. Corresponding to the new social finance of 1.97 trillion yuan in April, an increase of about 115.7 billion yuan year-on-year. Specifically, it is estimated that RMB loans (plus write off and ABS) will increase by 1.43 trillion yuan, entrusted loans and trust loans will decrease by 20 billion yuan, undiscounted bank acceptance bills will decrease by 200 billion yuan, corporate bonds will increase by 200 billion yuan, stock financing will increase by 60 billion yuan, and government bonds will increase by 420 billion yuan.
Steady growth in 2022 is the main tone, but the financial data since the beginning of the year still reflect the weak demand for physical financing. It is expected that the steady growth policy will continue to increase with the gradual and effective control of the epidemic. The valuation of the banking sector will be improved with the stabilization and improvement of the macro-economy, and the “over allocation” rating of the industry will be maintained. On the one hand, it benefits from the stable growth policy. Second, it is recommended to recommend small and medium-sized banks with good regional economy and deep cultivation of local real economy. It is suggested to focus on Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , Bank Of Ningbo Co.Ltd(002142) and Wuxi Rural Commercial Bank Co.Ltd(600908)
March m2 and Social Finance Review:
Base currency: net financial investment and hedging of recovered funds operated by the central bank
In March, the net fiscal expenditure invested about 1.27 trillion yuan in the base currency, and the central bank operated to withdraw 829 billion yuan of the base currency for hedging. In addition, 344.5 billion yuan of cash returned to banks due to the decline in cash demand, and the increase in bank deposits increased the statutory deposit reserve by 284.4 billion yuan. According to this calculation, the over storage rate at the end of March was 1.55%, with a month on month increase of 21bps.
