The pressure for steady growth has increased, and the key to steady growth at the central bank level is to broaden credit
In 2022, the probability of GDP target is set at about 5.5%, and strong means of steady growth are needed to achieve this goal. Therefore, even if we see that the GDP in the fourth quarter of 2021 rebounded by 0.3% to 5.2% compared with the third quarter, and the industrial added value continued to rise from September to December, its range is still not enough, because the target to be achieved is about 5.5%.
As for the statement of leverage ratio, "the leverage ratio has decreased for five consecutive quarters, creating space", which indicates that the leverage ratio may enter the upward period, and the possibility of "wide credit" has increased significantly. The press conference specifically explained the problem of five-year LPR and refuted the market's concern that "five-year LPR is aimed at real estate, so it is difficult to reduce it". We expect that the five-year LPR rate will be reduced on January 20, and it is more likely to reduce 10bp.
The short-term overweight of broad currency is not necessary, and the possibility of fiscal power increases
We believe that it is unlikely to cut interest rates again in the short term. If the economy can see improvement in the first quarter, the interest rate cut in January 2022 will become a "one-time interest rate cut", rather than the start of the interest rate cut cycle; We should insist that the money market interest rate fluctuates around the policy interest rate to avoid market fluctuations and ups and downs of market expectations.
Judging from the recent signs, the possibility of comprehensive policy efforts is rising significantly. "Under the strong leadership of the CPC Central Committee and the State Council, all aspects are also making efforts". After the central bank fired the first shot of "wide currency" steady growth, we believe that the follow-up wide credit, wide finance and stable real estate will follow up quickly. These measures will promote the steady improvement of the real economy, and then reverse the market's pessimistic expectation of economic downturn.
Continue to be optimistic about bancassurance + infrastructure + Hong Kong stocks
In December 2021, we began to focus more on the "bancassurance + infrastructure + Hong Kong stocks" sector. In early January 2022, we released the report "three logics of" bancassurance + infrastructure + Hong Kong stocks ". The main logics are:
(1) there is no invariable stock market style. After experiencing "undervalued - Blue Chip Stocks - growth stocks", the stock market style may return to "undervalued" again.
(2) the performance of "bancassurance + infrastructure + Hong Kong stocks" in 2021 is similar to that in 2018. The marginal change of policy is good for these sectors, so it is possible to repeat the rising trend in early 2019;
(3) now facing a serious shortage of assets, high dividend rate has high investment value.
Rising risk of bond market adjustment
We believe that the risk of bond market adjustment is rising. At present, the bond market has come before the central bank. After the central bank's press conference, the market generally prices the bond market according to at least one Omo and MLF interest rate cut, or has expectations for the central bank to adopt unconventional wide currency. The possibility of these expectations failing is not low.
From the perspective of factor analysis, almost all factors are beneficial to the bond market, especially in the stage of "after wide currency, before wide credit + wide finance", but this stage is unsustainable. According to the urgency of the central bank, the policy level has high requirements for stable growth, and other stable growth policies will be overweight, which are bad for the bond market. From the perspective of policy interest rate + interest margin, the current Omo interest rate is lower than 15bp in 2016, while the 5-year CDB and 3-year AA + are lower than the median 35bp in January October 2016, which is already at a low level.
At present, the only logic supporting the bond market is the shortage of assets. However, from the perspective of expected difference and policy interest rate + interest rate spread, we can no longer look at the bond market and prompt the bond market to adjust risks.
Risk tip: the central bank's policy exceeded expectations
