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Financial commentary
Published on 2018-04-17 20:01:55 Share it on the web version
                        Just recently, the central bank rarely fell sharply! Release 400 billion, A50 futures rose 2%! (with institutional interpretation)
Source: China Fund News Editor: Oriental Fortune Network

  The People's Bank of China decided to lower the deposit reserve ratio of some financial institutions to replace the mid-term borrowing facilities


In order to guide financial institutions to increase support for small and micro enterprises, increase the stability of the banking system funds, and optimize the liquidity structure, the People’s Bank of China decided to cut large-scale commercial banks and joint-stock commercial banks from April 25, 2018 onwards. City commercial bank, non-county rural commercial bank, foreign bankRMB reserve ratio is 1 percentage point;On the same day,The above banks will each use the funds released by the RRR cut to repay the medium-term borrowing facilities (MLF) they have borrowed from the central bank in the order of “first-off-first-off”.


The People's Bank of China will continue to implement a stable and neutral monetary policy, maintain a reasonable and stable liquidity, and guide the stable and moderate growth of money and credit and social financing, and create a suitable monetary and financial environment for high-quality development and supply-side structural reforms.


  The person in charge of the People's Bank of China stated:The replacement of the medium-term loans will be facilitated, and the stable and neutral monetary policy will remain unchanged.


  1. How will the convenience of replacing medium-term borrowings through the RRR cut?


A: The operation of downgrading of certain financial institutions and the replacement of medium-term borrowing facilities (MLF) mainly involves large-scale commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks, and foreign banks. These types of banks currently deposit funds. The base rate for the reserve ratio is relatively high at 17% or 15%, and institutions that borrow MLF are among these types of banks. Other financial institutions with a low reserve requirement ratio are not in this operating range.


The specific operation is divided into two steps: the first step, from April 25, 2018 onwards, to reduce the above-mentioned banks' renminbi deposit reserve ratio by 1 percentage point; on the second day, on the date of the RRR cut, banks with unexpired MLF will be held. In accordance with the order of “first borrow first, return first”, the capital released by the RRR cut will be used to repay the MLF borrowed by the central bank, slightly less than the MLF that needs to be repaid. Based on the data at the end of the first quarter of 2018, the repayment of MLF on the day of operation was about 900 billion yuan, while the release of incremental funds was about 400 billion yuan. Most of the incremental funds were released to city commercial banks and non-county rural commercial banks.


  2. What are the main considerations for replacing the medium-term borrowing facilities through the RRR cut?


A: At present, China's small and micro enterprises still face difficulties in financing and expensive financing. In order to increase the support for small and micro enterprises, some central bank loan funds can be replaced by appropriately reducing the statutory deposit reserve ratio, further increasing the stability of the banking system funds, optimizing the liquidity structure, and appropriately releasing incremental funds. Specifically, the first is that it can increase long-term funding, and the cost of bank funds will be reduced. The replacement of MLF has reduced the cost of interest paid by commercial banks, which will help reduce corporate financing costs.The second is to release 400 billion yuan in incremental funds, which increased the low-cost funding sources for small and micro enterprise loans. The PBOC will require relevant financial institutions to use the new funds mainly for the loans of small and micro enterprises, and appropriately reduce the financing costs of small and micro enterprises, and improve the financial services to small and micro enterprises. The above requirements will be included in the macro-prudential assessment (MPA) assessment.


  3. Does the RRR cut mean that the orientation of monetary policy changes?


A: The stable and neutral monetary policy remains unchanged. Most of the funds released this time are used to repay medium-term borrowing facilities, which is a substitute for two kinds of liquidity adjustment tools. The remaining small amount of funds is opposed to the tax period in mid-to-late April. Therefore, the liquidity is optimized. At the same time as the structure, the total amount of liquidity in the banking system remained basically unchanged and remained neutral. At the same time, we must also see that China is a developing country. To prevent financial risks, it is still necessary to maintain a relatively high reserve requirement ratio. The People's Bank of China will continue to implement a stable and neutral monetary policy, maintain a reasonable and stable liquidity, and guide the stable and moderate growth of money and credit and social financing, and create a suitable monetary and financial environment for high-quality development and supply-side structural reforms.


  Funds read the following


  1. The time point for the downgrade.


Today's trade war has escalated.


The United States issued an export ban on April 16 of the United States Eastern time that prohibits all U.S. businesses and individuals from selling hardware, software, or technical services to ZTE in any way. The deadline is seven years and it will be implemented immediately until 2025. At the same time, the UK National Cyber ​​Security Center also issued the latest recommendations to warn the telecommunications industry not to use ZTE's equipment and services.


In the afternoon, the Ministry of Commerce decided to implement temporary anti-dumping measures against imported sorghum originating in the United States.


  2, soothe market sentiment


Affected by the US Department of Commerce’s sanctions against ZTE and trade friction, the risk aversion in the broader market rose. The Shanghai Composite Index closed at 3,068.80 points, a decrease of 1.41%; the Shenzhen Component Index reported at 10,395.16 points, a decrease of 2.13%; the SME Board Index reported at 7,041.31 points, a decrease of 3.02%; The GEM was reported at 1783.74 points, a decrease of 2.99%.


The central bank's decision to lower the benchmark today has overall a positive effect on the stock market, and it will be of some use to ease the market's pessimism.


  Singapore's current a50 futures index rose 2%.


  Impact on the stock market, bond market, foreign exchange market?


  Cao Xiongfei, CEO of Chengze Assets, said:Lowering the deposit reserve ratio of some financial institutions can be interpreted as small positive interest rate. First, the following adjustments in deposit reserve ratios will facilitate the replacement of medium-term borrowing facilities, which will increase the market liquidity and reduce the bank’s capital costs. Second, it will increase the support for small and micro enterprises and facilitate the more efficient use of funds; and China’s deposits As the reserve ratio is high, there is still room for downward adjustment.


From the starting point, the central bank’s policy objectives include maintaining a steady economic growth. With current Sino-US trade frictions still tense, targeted downward adjustments are conducive to steady growth and expansion of domestic demand. At the same time, in the current situation of increased volatility in the capital market, it will help stabilize the market.


In terms of good sectors, banks are the first to earn, and big banks are more positive. Because the big banks themselves have more abundant capital, the cuts can obtain more low-cost funds. Loose liquidity is good for the entire market.


From the starting point, the central bank’s policy objectives include maintaining a steady economic growth. With current Sino-US trade frictions still tense, targeted downward adjustments are conducive to steady growth and expansion of domestic demand. At the same time, in the current situation of increased volatility in the capital market, it will help stabilize the market.


  State Gold Strategy Li Lifeng:With the high degree of uncertainty in foreign demand this year, monetary policy should have shifted somewhat this year, shifting from neutral to moderately expanding domestic demand. The "Central Bank of China has implemented targeted reductions in deposit reserve ratios for some banks" disclosed today is confirming our view that monetary policy has been fine-tuned.


  China Creation Strategy Wang Jun said:1. This year's monetary conditions and interest rate environment are more optimistic than last year. The preliminary views are being verified. 2. Best efforts are made to avoid internal and external pressure resonance. The domestic policy is in the hands of currency. 3. No longer worried about exchange rate fluctuations. Strong, monetary policy loose room to open; 4, for the next financial leverage, anti-risk safety mat. 5. The impact on the market, stock debt rebalancing, and blue-chip white horse rebalancing.


  Soochow Strategy: Logic of Growth Shares Further Strengthened


First, policy-oriented perspective. This time, the main objective of the downgrade is to increase support for small and micro enterprises. First, increase long-term funding, which will help reduce corporate financing costs; second, release 400 billion yuan in incremental funds, and increase the low-cost funds for small and micro enterprise loans. source. In addition, the PBOC will also require relevant financial institutions to use the new funds mainly for the loans of small and micro enterprises, appropriately reduce the financing costs of small and micro enterprises, and improve the financial services to small and micro enterprises. The above requirements will be included in macro-prudential considerations. Assessment (MPA) assessment.


Second, the marginal improvement in liquidity will help improve the valuation of small and medium-sized companies. The RRR cut means that the relatively loose liquidity this year is still expected to continue, and liquidity easing is the core supporting logic for the valuation of small and medium-sized companies.


  After the Central Bank lowered the trend of the stock market


As a way for the central bank to release liquidity, what kind of impact will the market bring? The Changjiang Securities Strategy Team once issued the document “History Looks, Market Trends after Targeting and Downgrades,” and analyzed the multiple cuts since 2014.


Since 2014, the central bank has conducted eight cuts, including three targeted directional cuts (April 2014, June 2014 and June 2015) and five full-rate cuts (February 2015, 2015 April, September 2015, October 2015 and March 2016). (Partially reduced quasi-adjustment has been accompanied by directional reduction. In this case, we classify it as an overall reduction.)


The Yangtze River Strategy Team has separately calculated the performance of the Shanghai Composite Index and the GEM Index for five trading days, 30 trading days and 90 trading days since 2014. The quasi-post market has not shown obvious rules; after the overall quasi-adjustment, the market has risen in the short term (5 trading days and 30 trading days), but there is no obvious rule in the long term.


Judging from the background of the previous several directional RRR cuts, generally speaking, the economy is facing certain downward pressure. When the risks of deflation and the decline in foreign exchange expenditures occur, they mainly fall into the fine-tuning of policies, and their influence and scope are less than the overall reduction. On the one hand, the central bank can hedge liquidity pressure in the current market on the one hand, but at the same time, because it is not an overall reduction, it will not convey a more relaxed liquidity expectation to the market, and there is a three-month buffer period. Implementation will be in 2018. As a whole, there is no absolute statistical rule for the impact of the RRR cut on the market, and it may affect the risk appetite to a greater extent. Under the current market environment, the RRR cut may create the possibility of increasing risk appetite in the short term. However, in the medium term, it is more necessary to pay attention to the landing of the medium- and long-term financial deleveraging policy.


Posted on 2018-04-17 20:06:51
                            Monetary policy shift
Posted on 2018-04-17 20:08:46
                            It is already late, and the market trend has been bad.
Posted on 2018-04-17 20:09:18
                            This is a great move
Posted on 2018-04-17 20:09:47

What is the reason for the institutions to buy 130 million Shichuang medical benefits? The annual report disclosure company is a global leader in digital retail, internet of things, and internet healthcare.
Posted on 2018-04-17 20:10:33
                            Rubbish
Posted on 2018-04-17 20:11:47
                            Prepare for raising interest rates?
Posted on 2018-04-17 20:13:51
                            It's more than 3,000 points. It doesn't break how it works. I've been using quilt for years.
Posted on 2018-04-17 20:14:30
                            Sub-new stocks Aobo’s April 26 earnings disclosureAnd other performance reports
Posted on 2018-04-17 20:14:33
                            Drop interest before raising interest rates? ? ? ?
Posted on 2018-04-17 20:15:51
                            Good for Fuman Electronics, 18-year performance forecast doubled, domestic chip replacement, new shares, small plate,
Posted on 2018-04-17 20:20:44
                            Agricultural Bank of China's major interest: the issue price will not be less than 4.15 yuan
According to the issued pricing basis (90% of the average trading price for the 20 trading days prior to the pricing base date and the higher of the net asset value per share attributable to the common shareholders of the parent company in the most recent period prior to the issuance date), the final increase will be finalized. The issue price will not be lower than 4.15 yuan (regardless of the ex-dividend factor), which is higher than the stock price of Agricultural Bank A shares since the last month
Posted on 2018-04-17 20:22:19
Big breasts beauty shares :Good for Fuman Electronics, 18-year performance forecast doubled, domestic chip replacement, new shares, small plate,
                            China casually replaces Qualcomm with a small-cap new stock
Posted on 2018-04-17 20:24:56
                            The expansion of the stock market is too great, and there are many companies waiting in line to go public. Without the stable growth of financial banks, all science and technology and economic development are castles in the air. Therefore, support for the introduction of favorable policies such as bank cuts was introduced! (for reference only)
Posted on 2018-04-17 20:24:58
                            You have a demotion plan, US stocks have a big deal tonight to deal with
Posted on 2018-04-17 20:26:39
                            Falling fast, slow down. However, this time still works. It's okay to go through May.
Posted on 2018-04-17 20:28:39
                            Still come and go, can you flow out of the bank?
Posted on 2018-04-17 20:29:35
                            I went to bed early
Posted on 2018-04-17 20:29:57
                            What do you want to do?
Posted on 2018-04-17 20:31:30
                            Keep ipo, what are clouds
Posted on 2018-04-17 20:33:02
                            The old American plummeted tonight.
Posted on 2018-04-17 20:34:42
                            The trend has come out of comfort to come out of comfort, useless, do not forget that there was a double down, one after another, "good" can not stop the market decline. If you can really rise, then go for bargaining, see you soon.
Posted on 2018-04-17 20:38:35
                            Two days ago, he said he would raise interest rates. This is a big problem! Late in the stock market, you will be excited, but this time the cut is not simple! It is impossible to blindly stabilize the stock market! The risk is not small
Posted on 2018-04-17 20:39:31
Xujie996 :It is already late, and the market trend has been bad.
                            I still make money this wave ~ first reflect on their own operating problems
Posted on 2018-04-17 20:40:45
                            Did not read
Posted on 2018-04-17 20:42:31
                            Do not leave home, good
Posted on 2018-04-17 20:45:27
                            Go high and go low
Posted on 2018-04-17 20:46:31
                            Don't leave, fellow.
Posted on 2018-04-17 20:49:14
                            The stock is used for holding, not for speculation. You are the original intention, losing money is inevitable.
Posted on 2018-04-17 20:50:39
                            Go high, walk
Posted on 2018-04-17 20:51:48
                            Going high and going low tomorrow, we must set up a large batch of leeks
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Source: China Fund News Editor: Oriental Fortune Network

  The People's Bank of China decided to lower the deposit reserve ratio of some financial institutions to replace the mid-term borrowing facilities

In order to guide financial institutions to increase support for small and micro enterprises, increase the stability of the banking system funds, and optimize the liquidity structure, the People’s Bank of China decided to cut large-scale commercial banks and joint-stock commercial banks from April 25, 2018 onwards. City commercial bank, non-county rural commercial bank, foreign bankRMB reserve ratio is 1 percentage point;On the same day,The above banks will each use the funds released by the RRR cut to repay the medium-term borrowing facilities (MLF) they have borrowed from the central bank in the order of “first-off-first-off”.

The People's Bank of China will continue to implement a stable and neutral monetary policy, maintain a reasonable and stable liquidity, and guide the stable and moderate growth of money and credit and social financing, and create a suitable monetary and financial environment for high-quality development and supply-side structural reforms.

  The person in charge of the People's Bank of China stated:The replacement of the medium-term loans will be facilitated, and the stable and neutral monetary policy will remain unchanged.

  1. How will the convenience of replacing medium-term borrowings through the RRR cut?

A: The operation of downgrading of certain financial institutions and the replacement of medium-term borrowing facilities (MLF) mainly involves large-scale commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks, and foreign banks. These types of banks currently deposit funds. The base rate for the reserve ratio is relatively high at 17% or 15%, and institutions that borrow MLF are among these types of banks. Other financial institutions with a low reserve requirement ratio are not in this operating range.

The specific operation is divided into two steps: the first step, from April 25, 2018 onwards, to reduce the above-mentioned banks' renminbi deposit reserve ratio by 1 percentage point; on the second day, on the date of the RRR cut, banks with unexpired MLF will be held. In accordance with the order of “first borrow first, return first”, the capital released by the RRR cut will be used to repay the MLF borrowed by the central bank, slightly less than the MLF that needs to be repaid. Based on the data at the end of the first quarter of 2018, the repayment of MLF on the day of operation was about 900 billion yuan, while the release of incremental funds was about 400 billion yuan. Most of the incremental funds were released to city commercial banks and non-county rural commercial banks.

  2. What are the main considerations for replacing the medium-term borrowing facilities through the RRR cut?

A: At present, China's small and micro enterprises still face difficulties in financing and expensive financing. In order to increase the support for small and micro enterprises, some central bank loan funds can be replaced by appropriately reducing the statutory deposit reserve ratio, further increasing the stability of the banking system funds, optimizing the liquidity structure, and appropriately releasing incremental funds. Specifically, the first is that it can increase long-term funding, and the cost of bank funds will be reduced. The replacement of MLF has reduced the cost of interest paid by commercial banks, which will help reduce corporate financing costs.The second is to release 400 billion yuan in incremental funds, which increased the low-cost funding sources for small and micro enterprise loans. The PBOC will require relevant financial institutions to use the new funds mainly for the loans of small and micro enterprises, and appropriately reduce the financing costs of small and micro enterprises, and improve the financial services to small and micro enterprises. The above requirements will be included in the macro-prudential assessment (MPA) assessment.

  3. Does the RRR cut mean that the orientation of monetary policy changes?

A: The stable and neutral monetary policy remains unchanged. Most of the funds released this time are used to repay medium-term borrowing facilities, which is a substitute for two kinds of liquidity adjustment tools. The remaining small amount of funds is opposed to the tax period in mid-to-late April. Therefore, the liquidity is optimized. At the same time as the structure, the total amount of liquidity in the banking system remained basically unchanged and remained neutral. At the same time, we must also see that China is a developing country. To prevent financial risks, it is still necessary to maintain a relatively high reserve requirement ratio. The People's Bank of China will continue to implement a stable and neutral monetary policy, maintain a reasonable and stable liquidity, and guide the stable and moderate growth of money and credit and social financing, and create a suitable monetary and financial environment for high-quality development and supply-side structural reforms.

  Funds read the following

  1. The time point for the downgrade.

Today's trade war has escalated.

The United States issued an export ban on April 16 of the United States Eastern time that prohibits all U.S. businesses and individuals from selling hardware, software, or technical services to ZTE in any way. The deadline is seven years and it will be implemented immediately until 2025. At the same time, the UK National Cyber ​​Security Center also issued the latest recommendations to warn the telecommunications industry not to use ZTE's equipment and services.

In the afternoon, the Ministry of Commerce decided to implement temporary anti-dumping measures against imported sorghum originating in the United States.

  2, soothe market sentiment

Affected by the US Department of Commerce’s sanctions against ZTE and trade friction, the risk aversion in the broader market rose. The Shanghai Composite Index closed at 3,068.80 points, a decrease of 1.41%; the Shenzhen Component Index reported at 10,395.16 points, a decrease of 2.13%; the SME Board Index reported at 7,041.31 points, a decrease of 3.02%; The GEM was reported at 1783.74 points, a decrease of 2.99%.

The central bank's decision to lower the benchmark today has overall a positive effect on the stock market, and it will be of some use to ease the market's pessimism.

  Singapore's current a50 futures index rose 2%.

  Impact on the stock market, bond market, foreign exchange market?

  Cao Xiongfei, CEO of Chengze Assets, said:Lowering the deposit reserve ratio of some financial institutions can be interpreted as small positive interest rate. First, the following adjustments in deposit reserve ratios will facilitate the replacement of medium-term borrowing facilities, which will increase the market liquidity and reduce the bank’s capital costs. Second, it will increase the support for small and micro enterprises and facilitate the more efficient use of funds; and China’s deposits As the reserve ratio is high, there is still room for downward adjustment.

From the starting point, the central bank’s policy objectives include maintaining a steady economic growth. With current Sino-US trade frictions still tense, targeted downward adjustments are conducive to steady growth and expansion of domestic demand. At the same time, in the current situation of increased volatility in the capital market, it will help stabilize the market.

In terms of good sectors, banks are the first to earn, and big banks are more positive. Because the big banks themselves have more abundant capital, the cuts can obtain more low-cost funds. Loose liquidity is good for the entire market.

From the starting point, the central bank’s policy objectives include maintaining a steady economic growth. With current Sino-US trade frictions still tense, targeted downward adjustments are conducive to steady growth and expansion of domestic demand. At the same time, in the current situation of increased volatility in the capital market, it will help stabilize the market.

  State Gold Strategy Li Lifeng:With the high degree of uncertainty in foreign demand this year, monetary policy should have shifted somewhat this year, shifting from neutral to moderately expanding domestic demand. The "Central Bank of China has implemented targeted reductions in deposit reserve ratios for some banks" disclosed today is confirming our view that monetary policy has been fine-tuned.

  China Creation Strategy Wang Jun said:1. This year's monetary conditions and interest rate environment are more optimistic than last year. The preliminary views are being verified. 2. Best efforts are made to avoid internal and external pressure resonance. The domestic policy is in the hands of currency. 3. No longer worried about exchange rate fluctuations. Strong, monetary policy loose room to open; 4, for the next financial leverage, anti-risk safety mat. 5. The impact on the market, stock debt rebalancing, and blue-chip white horse rebalancing.

  Soochow Strategy: Logic of Growth Shares Further Strengthened

First, policy-oriented perspective. This time, the main objective of the downgrade is to increase support for small and micro enterprises. First, increase long-term funding, which will help reduce corporate financing costs; second, release 400 billion yuan in incremental funds, and increase the low-cost funds for small and micro enterprise loans. source. In addition, the PBOC will also require relevant financial institutions to use the new funds mainly for the loans of small and micro enterprises, appropriately reduce the financing costs of small and micro enterprises, and improve the financial services to small and micro enterprises. The above requirements will be included in macro-prudential considerations. Assessment (MPA) assessment.

Second, the marginal improvement in liquidity will help improve the valuation of small and medium-sized companies. The RRR cut means that the relatively loose liquidity this year is still expected to continue, and liquidity easing is the core supporting logic for the valuation of small and medium-sized companies.

  After the Central Bank lowered the trend of the stock market

As a way for the central bank to release liquidity, what kind of impact will the market bring? The Changjiang Securities Strategy Team once issued the document “History Looks, Market Trends after Targeting and Downgrades,” and analyzed the multiple cuts since 2014.

Since 2014, the central bank has conducted eight cuts, including three targeted directional cuts (April 2014, June 2014 and June 2015) and five full-rate cuts (February 2015, 2015 April, September 2015, October 2015 and March 2016). (Partially reduced quasi-adjustment has been accompanied by directional reduction. In this case, we classify it as an overall reduction.)

The Yangtze River Strategy Team has separately calculated the performance of the Shanghai Composite Index and the GEM Index for five trading days, 30 trading days and 90 trading days since 2014. The quasi-post market has not shown obvious rules; after the overall quasi-adjustment, the market has risen in the short term (5 trading days and 30 trading days), but there is no obvious rule in the long term.

Judging from the background of the previous several directional RRR cuts, generally speaking, the economy is facing certain downward pressure. When the risks of deflation and the decline in foreign exchange expenditures occur, they mainly fall into the fine-tuning of policies, and their influence and scope are less than the overall reduction. On the one hand, the central bank can hedge liquidity pressure in the current market on the one hand, but at the same time, because it is not an overall reduction, it will not convey a more relaxed liquidity expectation to the market, and there is a three-month buffer period. Implementation will be in 2018. As a whole, there is no absolute statistical rule for the impact of the RRR cut on the market, and it may affect the risk appetite to a greater extent. Under the current market environment, the RRR cut may create the possibility of increasing risk appetite in the short term. However, in the medium term, it is more necessary to pay attention to the landing of the medium- and long-term financial deleveraging policy.