The central bank decided to reduce the RMB deposit reserve ratio of large commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks and foreign banks by 1 percentage point from April 25, 2018. On the same day, the above banks will follow In the order of first returning, the funds released by the RRR are used to repay the medium-term loan facility (MLF) of the central bank it borrows. The central bank said that first, it can increase long-term funding, and bank capital costs will be reduced. The replacement of MLF has reduced the cost of interest payment by commercial banks, which is conducive to reducing the financing costs of enterprises. The second is to release 400 billion yuan of incremental funds, increasing the low-cost funding sources for small and micro enterprise loans.
Wang Jun, chief strategist of China Chuang Securities, commented: 1. This year's monetary conditions and interest rate environment are more optimistic than last year. The previous views are being verified; 2. Trying to avoid internal and external pressure resonance, the domestic policy is in the currency; 3. No Concerned about exchange rate fluctuations, the renminbi is due to arbitrage reasons, the value of the currency is firm, and the loose space of monetary policy is open; 4, for the next financial de-leverage, anti-risk security mat. 5. Influence on the market, rebalance the stock bonds, and balance the growth of blue chips.
The People's Bank of China announced on April 17 that starting from April 25, 2018, the renminbi deposit reserve ratio of large commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks and foreign banks will be lowered by 1 percentage point. In this regard, Yan Yuejin, research director of the Yiju Research Center think tank, commented as follows:
The central bank's policy of RRR cuts is obviously different from many market expectations, which fully proves the particularity of the current macroeconomic and industrial economic development. The logic is that the current risk of insufficient liquidity begins to increase. From the perspective of the stable operation of the banking system and the cost reduction of the industrial economy, it is actually necessary to have a similar RRR. A similar approach is naturally the effect of “sending the spring breeze” in the context of the current tightening of funds.
It should be said that the direct effect of the RRR reduction is that the available funds of the bank will increase, which will directly bring about the increase of liquidity and the reduction of the cost of capital. Therefore, for various banks, the degree of self-ownership in the field of loans will rise in the future. At the same time, the support for related industries will also increase.
From the perspective of the real estate market, it is now facing some risks of tightening funds, especially in terms of bank loans. Therefore, similar policies can obviously alleviate the risk of insufficient funds in real estate. Taking into account the recent statistics of the National Bureau of Statistics, it is slightly pessimistic in itself, but the central bank's policy of RRR cuts will help to achieve a more relaxed mortgage environment.
For such an environment, it also needs to be seen, mainly in line with the supply-side structural reforms. The “household and non-speculation” is still the red line. This will not break through, but for some developers, It is possible to obtain lower-cost funds, which is conducive to the rise of data such as real estate development investment this year. For homebuyers, it may be that the bank’s relatively harsh loan policy will change, which has a more positive effect. However, it must be noted that the abundance of funds is to create a fair environment, rather than to encourage all types of illegal funds to enter the property market, which is essentially different from the loose monetary environment of the past.
Dr. Zhang Ming, chief economist of Ping An, said that the seemingly "neutral" downgrade event said that the author had previously pointed out that the Chinese government may take measures to hedge the adverse impact of trade wars on economic growth. Recent high-frequency data show that the domestic growth momentum is declining, and the concern about the adverse effects of the trade war is rising, which makes the probability of tightening the financial regulatory policies that may occur in the second quarter decline, while the central bank's liquidity operation is relaxed at a later time (before we judged) Will happen in the third quarter). The specific impact of the central bank’s move remains to be seen, but the direct impact is to benefit the bond market and help stabilize the stock market and the macro economy.
Li Jinfeng of Guojin Securities said that with the high degree of uncertainty of external demand this year, this year's monetary policy should be shifted from neutral to tight to moderately expand domestic demand. The “central bank’s targeted reduction of the deposit reserve ratio for some banks” disclosed today confirms our view that monetary policy is shifting in fine-tuning.
The People's Bank of China lowered the deposit reserve ratio of some financial institutions by 1 percentage point. Li Dazhao, chief economist of Yingda Securities, said that the central bank’s operation on the RRR reduction of some financial institutions and the replacement of medium-term lending facilities (MLF) aims to increase long-term capital supply, reduce corporate financing costs, and release 400 billion yuan of incremental funds. The low-cost source of funds for small and micro-enterprise loans, solving the problem of financing difficult financing for small and micro enterprises, has a positive effect on stabilizing economic growth, and has a very positive effect on the stability of the stock market. It is a major positive news.
The central bank decided to cut the deposit reserve ratio by one percentage point from April 25, 18, and release liquidity to the market. The central bank’s move is very timely at the moment. On the one hand, by lowering the RRR, it is possible to release 400 billion yuan of incremental funds to the market, alleviating the pressure on the current market shortage of funds and promoting economic growth. On the other hand, under the current background of Sino-US trade friction, the RRR cut can increase the long-term capital supply, and the bank capital cost will be reduced. The replacement of MLF will reduce the cost of commercial bank interest payment, which will help reduce the financing cost of enterprises. This is no different to greatly boost the confidence of investors.
I have always believed that Sino-US trade friction will eventually be resolved through negotiations, but there will still be some partial friction in some areas, which will have certain impact on some related listed companies. Today, the US Department of Commerce announced restrictions on the export of ZTE, which also caused market concerns, the market has undergone a major adjustment. The central bank's RRR cuts can greatly boost investors' confidence in the market outlook.
Today, the National Development and Reform Commission also released a news report on the investment restrictions on the cancellation of foreign investment in the automotive industry, and further expressed China’s sincerity in expanding its openness. At the end of last year, we gradually opened up the financial market, that is, increased the proportion of foreign investment in domestic financial institutions, and now we are releasing shares in the auto industry. At the same time, in terms of intellectual property protection, China will also pass legislation to protect intellectual property rights. This series of measures shows China's determination to expand its opening up, which is conducive to promoting the agreement on Sino-US trade negotiations and helping to win a better trading environment for China.
This morning, the Bureau of Statistics released economic data for the first quarter, with an economic growth rate of 6.8% in the first quarter. Basically in line with expectations. The effectiveness of economic restructuring has been remarkable. According to the data, the contribution of consumption to GDP in the first quarter has reached 77.8%, far exceeding the contribution of investment and exports, and the dependence of China's economic growth on exports has further weakened. At the same time, the tertiary industry (service industry) contributed 61.6% of GDP, far exceeding the primary and secondary industries. This shows that after years of reform and transformation efforts, China's overall economic situation has been steadily improving, and the quality of economic growth has increased substantially. This is the basis for the economic strength of the stock market.
The recent adjustment of the A-share market was mainly affected by the international situation and Sino-US trade frictions. The economic fundamentals have not changed, and many high-quality stocks have been wrongly killed. Today, the central bank lowered the deposit reserve ratio to boost market confidence, and the market outlook is expected to rebound and gradually repair the previous decline.
For example, Guan Qingyou, dean of the Financial Research Institute and chief economist, said on Weibo on the 17th that the RRR cut will be repeated in 2014. This time the RRR cut is very strong. Although the economy performed well in the first quarter, high-frequency data showed that the downside signs were obvious; the tight capital situation made the financing of SMEs more difficult, and it is necessary to maintain moderate liquidity; the impact of Sino-US trade friction may gradually emerge, and the RRR reduction will help. Hedging risk; this year's monetary policy may be slightly marginal, the regulatory rhythm may also slow down, and downward pressure on asset prices eased.
The central bank's targeted RRR cut corresponds to the impact on A-shares. The Soochow strategy believes that the foothold is to further strengthen the growth logic. There are two main reasons: First, the policy-oriented perspective. The RRR cut is mainly to increase support for small and micro enterprises. First, increase long-term capital supply is conducive to reducing corporate financing costs; second, release 400 billion yuan of incremental funds, and increase low-cost funds for small and micro enterprise loans. source. In addition, the People's Bank of China will also require relevant financial institutions to mainly use new funds for small and micro enterprise loans, and appropriately reduce the financing costs of small and micro enterprises, and improve financial services for small and micro enterprises. The above requirements will be included in the macro-prudential. Assessment (MPA) assessment. Second, the marginal improvement of liquidity will help to improve the valuation space of small and medium-sized enterprises. The RRR cut means that relatively loose liquidity is still expected to continue this year, and liquidity easing is the core supporting logic of small and medium-sized high valuation.
Lian Ping said that although the coverage is wide, it is still targeted reduction: the RRR mainly covers major deposit-type financial institutions, but explicitly requires the replacement of unexpired MLF with the RRR, and requires excess funds for small and micro enterprises. Credit, and strengthen the assessment in the MPA, it is targeted to reduce the standard, directed to support small and micro enterprises. MLF funds have been replaced by lower-cost excess reserves, and the bank's liability costs have been reduced, which is conducive to enhancing the stability of liabilities, optimizing the liquidity structure, especially increasing long-term stable funds, supplemented by MPA assessment requirements, which is expected to drive certain Incremental funds of scale are invested in small and micro enterprises, reducing their financing costs.
CITIC consolidated analysts expect that the Chinese central bank's targeted RRR cut will release 1.3 trillion yuan in liquidity. The RRR cut is due for the hedging of the MLF. Based on the data at the end of the first quarter of 2018, the MLF will be repaid about 900 billion yuan on the day of operation, and the incremental fund will be released by about 400 billion yuan.
Reasons for the RRR reduction: lowering the cost of capital, lowering the deposit reserve ratio of some financial institutions to replace the medium-term loan convenience, facilitating the reduction of the cost of interest payment by commercial banks, helping to reduce the financing cost of enterprises; releasing collateral and reducing the RRR replacement of some financial institutions The medium-term loan facility facilitates the release of interest rate bonds and high-grade credit bonds pledged by the borrowing bank to improve the inter-bank liquidity level; facilitates the expansion of the bank's debt side: the current pressure on the bank's off-balance sheet funds is still large, but the funds are returned. The process is subject to friction, which makes the overall growth rate of M1, M2 and RMB deposits slower, and the RRR cut will increase the currency multiplier, which will facilitate the expansion of the bank's debt side.
Impact on the bond market: Lowering the deposit reserve will drive the narrowing of the term spread, and the long-term interest rate will have downward pressure. The yield of the next 10-year government bond will fall to the range of 3.4% to 3.6%.
As for the impact on the stock market: RRR cuts are conducive to hedging recent overseas shocks and stabilizing market expectations, especially for the financial industry, which is conducive to the banking system liabilities.
Go ahead tomorrow and continue to sell.