Author: Asset and Liability Management Department, China Merchants Bank Research Institute
In November, China added 2 new social finance45 trillion (expected 2.)45 trillion), an increase of 455.6 billion over the same period last year;New RMB loans109 trillion (expected 1.)21 trillion), a decrease of 136.8 billion from the same period last year;M2 increased by 10 percent year-on-year0% (expected 10.)07%）。
1. Credit: Residents' medium- and long-term loans continued to increaseAlthough the PBOC has recently repeatedly emphasized that "the credit work at the end of the year and the beginning of the year will be coordinated and the credit fluctuations will be moderately smoothed", only 109 trillion, significantly weaker than seasonal. Figure 1: Credit additions in November were only 109 trillion, significantly weaker than seasonal.
Data**: macrobond, China Merchants Bank Research Institute localized bond work carried out, on the one hand, it affects infrastructure investment and financing, on the other hand, there is a phenomenon of low-interest ** debt replacing high-interest on-balance sheet loans, superimposed real estate investment is still sluggish, and the manufacturing boom has fallen to 494. As a result, the medium and long-term loans of enterprises still declined year-on-year, and the decline expanded. Loans to non-financial enterprises increased by RMB822.1 billion, of which medium and long-term loans increased by RMB446.0 billion in the month, a year-on-year decrease of RMB290.7 billionShort-term loans increased by MOP170.5 billion, an increase of MOP194.6 billion year-on-year. Under the weak demand for credit, bill financing has reappeared "volume increase and price decline". The net financing of bills in November was 209.2 billion, an increase of 54.3 billion yuan year-on-yearThe half-year direct discount interest rate of the state-owned stock bank is 117%, down another 14bp month-on-month. Figure 2: Non-Financial Corporate Loans Remain a Major Drag
Source**: Macrobond, China Merchants Bank Research InstituteFigure 3: Corporate loans are still supported by short-term loans and bills, while medium- and long-term loans are sluggish
Data**: macrobond, China Merchants Bank Research Institute's real estate policy increased to continue to support the recovery of second-hand housing, and residents' medium and long-term loans increased year-on-year for three consecutive months, but the growth rate narrowed. In November, residents' medium and long-term loans increased by RMB233.1 billion, an increase of RMB22.8 billion year-on-year. Short-term loans to residents increased by 59.4 billion yuan, an increase of 6.9 billion yuan year-on-year. Figure 4: Residents' long-term loans increased year-on-year for three consecutive months, but the growth rate contracted
Source**: Macrobond, China Merchants Bank Research Institute2. Social Finance: ** Debt Afterburner SupportIn November, 2 new social finance was added45 trillion, the growth rate of social financing stock rebounded to 94%。* Debt is still the main support item, and ** debt financing was added in November15 trillion yuan, an increase of 498 billion yuan year-on-year, of which 353 billion yuan was net financing of special refinancing bonds. As of the end of November, a total of 137 trillion is nearing the end. Under the low base last year, the issuance of corporate bonds increased year-on-year, but the financing of urban investment platforms still contracted. Corporate bond financing increased by RMB133 billion in November, an increase of RMB72.6 billion year-on-year. In addition, in November, the scale of trust products invested in industrial and commercial enterprises and basic industries increased significantly, driving trust loans to increase by 56.2 billion yuan year-on-year, supporting non-standard financing. Figure 5: New Social Finance in November Meets Market Expectations
Source**: Macrobond, China Merchants Bank Research InstituteFigure 6: The issuance of special refinancing bonds drove new social financing
Source**: Macrobond, China Merchants Bank Research Institute3. Money: Funds flow back to the public sectorThe year-on-year growth rate of M2 fell to 100%, M1 fell for 7 consecutive months to 13%。On the one hand, the issuance of bonds leads to the return of funds to the public sector;On the other hand, the decline in bulk commodities and the second dip in PPI during the year show that the procurement demand of enterprises is insufficient, and the degree of capital activation is not high. Corporate deposits increased by MOP248.7 billion in November, an increase of MOP51.1 billion year-on-year. The marginal warming of second-hand housing superimposed the return of financial management, and residents' deposits increased by 908.9 billion, a year-on-year decrease of 134 trillion. In addition, ** bond financing was combined with relatively slow fiscal expenditure, and fiscal deposits decreased by 329.3 billion yuan in November, a year-on-year decrease of 38.8 billion yuan. Figure 7: M1 growth continued to decline in November
Source**: Macrobond, China Merchants Bank Research InstituteFourth, the impact of the bond market: interest rates are declining, and the curve is steepeningIn November, the liquidity of the interbank market showed a tight balance, market funds** continued to be above the policy rate, short-term bond yields rose, and 1Y treasury bonds and CDB bonds closed at 234% and 250%, up 10-13bp month-on-month;Medium- and long-term bonds fell slightly due to the weaker-than-expected economic data, and the 10Y Treasury closed at 267%, down 3bp month-on-month, and the 10y-1y spread of treasury bonds has been compressed to 33bp, which is at a historical low;The 10Y CDB bond closed at 277%, a slight increase of 3bp month-on-month. On December 13, the ** Economic Work Conference set the tone to continue to implement a proactive fiscal policy and a prudent monetary policy, and there was no signal release beyond expectations. This month's financial data shows that the main contribution of social finance still comes from bonds, and there is no obvious ** on the corporate side. As a result, interest rates of all maturities in the bond market have fallen, and the curve has steepened. Looking ahead, it is expected that the bond market interest rate will continue to price in the expectation of monetary policy easing, superimposed by the release of institutional allocation demand at the end of the year, the interest rate may be low**, and the probability of a sharp rise is low. 5. Prospects: The growth rate of social finance may rise againOverall, the performance of financial data was highly consistent with market expectations, reflecting ** as expected, but it has not yet translated into economic vitality. Looking ahead, the issuance of new 1 trillion yuan of treasury bonds will continue to push up the growth rate of social finance, fiscal spending at the end of the year will accelerate or stabilize the growth rate of M2, and the broad liquidity surplus ("M2-social finance" growth rate difference) may continue to contract. Figure 8: Broad Liquidity Surplus Narrows to 06pct
Source**: Macrobond, China Merchants Bank Research Institute