Event overview
On January 18, 2022, the people’s Bank of China held a press conference on financial statistics in 2021.
What signals will the central bank release at the press conference?
1. Strong determination to stabilize growth
At the central bank meeting, it was mentioned that “we should be more proactive and enterprising, pay attention to the forward force”, “open the monetary policy toolbox a little larger”, and the policy force should be “sufficient”, “accurate” and “forward”, indicating that the policy has a strong determination to stabilize growth. At the same time, the central bank proposed to “do things quickly, operate prospectively, walk in front of the market curve and respond to the general concerns of the market in a timely manner”, indicating that the management of market expectations by policies is being strengthened.
2. Steady growth
① the central bank mentioned that “the macro leverage ratio has decreased for five consecutive quarters, creating space for future monetary policy”, indicating that it is acceptable to increase leverage at different stages; ② The central bank said that the average deposit reserve is 8.4%, and the space for further adjustment is smaller, but there is still a certain space, “which can be used according to the economic and financial operation and the needs of macro-control”. It shows that the short-term probability of RRR reduction is low, and the medium-term decision is made according to policy needs.
Guiding significance for bank stock investment?
1. The main line of steady growth moves from differences to consensus
The market is tangled about whether the credit can be implemented. We believe that the current policy determination of financial supervision has been fully revealed. Most of the GDP targets of the two sessions of local governments are higher than the two-year compound growth rate from 2019 to 2021. More policies will be introduced in the future. Under the general trend of steady growth, it is only a matter of time for the implementation of broad credit. It is expected that the subsequent market cognition will move from disagreement to consensus in the tangle, and bank stocks will continue to benefit from the valuation repair brought by steady growth.
2. There is no need to tangle with interest transfer, and the principal is the most important
The central bank proposed at the meeting to “promote the financial system to transfer profits to the real economy”, which we believe will not have an essential impact on the bank market. ① The form of profit transfer is LPR interest rate reduction, which has been expected by the market. ② The way to transfer interest is to reduce the debt cost together with the asset interest rate, rather than the bank’s unilateral transfer of interest. The supervision has gradually recognized the need to control the debt cost first, and the central bank has also emphasized it. ③ The result of interest transfer is stable growth, which is conducive to the recovery of bank loan principal. The current valuation of the banking sector has broken net, so there is no need to tangle with interest.
2. Continue to focus on recommending high-quality listed banks
Key recommendations: Industrial Bank Co.Ltd(601166) / Ping An Bank Co.Ltd(000001) + Bank Of Nanjing Co.Ltd(601009) / Postal Savings Bank Of China Co.Ltd(601658) .
Risk tip: macroeconomic stall and significant exposure of adverse.
