Key investment points
Macro communication and Thinking: why is post cycle consumption better than real estate?
Real estate sales “ignore” the decline of mortgage interest rate. The relaxation of real estate policy has expanded from local to national. Generally speaking, the mortgage interest rate is a synchronous indicator of the steady growth of real estate sales, even slightly ahead from time to time, and the reduction of interest rate will drive the stabilization and recovery of real estate sales, but this law seems to “fail” this year, and real estate sales “ignore” the decline of mortgage interest rate since the beginning of the year.
The lending period is long, the interest margin is widened, and the epidemic situation is dragged down. We believe that there may be three main reasons: first, the lending cycle is too long, which reduces the transaction efficiency. Under the condition that the interest rate level is basically the same, the average lending cycle last year was nearly half a month longer than that in 19 years; Second, the loan interest margin between the second and first houses has widened rapidly, restricting the demand for improvement; Third, the epidemic situation is also a drag. As the situation improves, the relationship between real estate sales and mortgage interest rates is expected to recover.
Do not promote the upgrading of real estate structure. What needs special attention is that the positioning of not speculation in real estate is still adhered to. The rapid, high and widespread rise of house prices may cause concern. Judging the trend of real estate through “asset income cost” is inevitably different. We believe that this round of real estate improvement may focus on structural upgrading: first, the inter regional population has moved from low-level areas to high-level areas; Second, the release of improving demand within the region.
The increase in volume is more important than the increase in price, which drives the post cycle even more. The improvement of real estate is heavier than the price increase, which will pull the income of the consumer industry in the later cycle more significantly than the real estate itself. Comparing the impact of this epidemic with that of Wuhan, we find that the impact degree of relevant optional consumption in the post real estate cycle has been improved compared with that in Wuhan. The promotion of follow-up policies has led to the stabilization and recovery of real estate sales, and the revenue performance of these post cycle consumer industries may be relatively dominant. We believe that consumption after the epidemic may become the main line of the equity market.
One week scan:
Epidemic situation: the national epidemic continues to improve, and the United States is still deteriorating. As of May 20, the number of newly confirmed cases in Chinese Mainland, Hong Kong, Macao and Taiwan exceeded 1300 and 500000 respectively in a week. In addition to Hong Kong, Macao and Taiwan, there are 71 medium and high-risk areas. At present, the epidemic situation in China is still dominated by the large-scale epidemic situation in Shanghai, but there is also a significant drop in the number of new cases this week. Except for the newly diagnosed cases in Beijing, Fujian, Henan, Guangdong and Anhui, most other provinces and cities have basically been cleared. With the sharp drop in the number of new cases in all provinces this week, the spread trend of the national epidemic has been effectively curbed. The epidemic in the United States remains high. The United States added about 720000 this week, up 45.5% from last week. The epidemic situation is grim. The global covid-19 pneumonia caused about 10000 new deaths a week, a slight decrease of 8.59% compared with last week. The United States plans to resume the mask ban. BA. 4 and ba 5 may become the dominant strain in the EU. The European Center for Disease Control and prevention stressed that countries must develop plans to rapidly deploy a second dose of “booster needle” among the most vulnerable groups.
Overseas: the expectation of interest rate hike in the euro zone is rising, and the heat of manufacturing in the United States has subsided. Federal Reserve official Meister expressed support for the Federal Reserve to raise interest rates by 50 basis points at each of the next two policy meetings to curb the rapid rise of inflation. Evans of the Federal Reserve said that by July or September, the Federal Reserve will reduce the rate increase to a single 25 basis points, but there will be a single 50 basis points increase before the end of the year. In an interview, Federal Reserve Chairman Powell said that FOMC widely supports raising interest rates by 50 basis points at the next two meetings. Interest rate hikes in the eurozone are expected to rise. European central bank governor Rehn said that interest rates may be raised in the summer and stressed the importance of quickly getting rid of negative interest rates. Most members of the ECB’s Governing Committee support raising interest rates at least twice this year, 25 basis points each time. The New York Fed Manufacturing index fell to negative. The growth rate of UK CPI reached the highest in 40 years.
Prices: Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale prices fell and international oil prices rebounded. The Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price index of the Ministry of agriculture fell month on month this week; Last week, pork prices fell month on month; This week, the average prices of mutton and vegetables fell month on month, while the average prices of beef, eggs and fruits rose month on month. This week, the average price of Brent crude oil and WTI crude oil rebounded month on month, and the average price of China’s rebar fell.
Liquidity: the capital interest rate is divided, and the US dollar index falls. The short-term capital interest rate was differentiated this week. The weekly mean value of dr001 increased by 2.6bp month on month, and the weekly mean value of dr007 decreased by 0.7bp month on month; The 3-month Shibor interest rate decreased, and the weekly average of the 3-month certificate of deposit issuance interest rate decreased. This week, the interest rate of bills was divided. The weekly average of 1-month rediscount interest rate of state-owned shares and silver bills decreased, and the weekly average of 6-month and 1-year rediscount interest rate increased. This week, the central bank conducted a total of 50 billion yuan reverse repo and 100 billion yuan MLF operations in the open market. A total of 60 billion yuan reverse repo and 100 billion yuan MLF expired in the open market of the central bank; Next week, the central bank will have 50 billion yuan of reverse repo due in the open market. The average value of the US dollar index fell this week and the RMB appreciated.
Performance of major categories of assets: Hong Kong stocks led the rise, while treasury bond yields fell. Hong Kong stocks were among the top gainers this week, with major A-share indexes rising, most of the rest of the world’s indexes rising, and all three major US stock indexes falling. The top three sectors in which Chinese stocks rose this week were coal, power equipment and non-ferrous metals. This week, the weekly average yield of 10-year Treasury bonds decreased by 1.6bp, and the weekly average yield of 10-year CDB bonds decreased by 0.7bp.
Risk tip: policy changes, economic recovery is less than expected.
