Real estate financing improved, steel peaks were delayed, and coal supply was strengthened
Shenwan Hongyuan Macro Weekly · Issue 152
Dr. Qin Tai Chief Macro Analyst, CFA
Tu Qiang / Jia Dongxu Macro Analyst
Shenwan Hongyuan Macro
Main content
Weekly view: real estate financing improved, steel peak delayed, coal supply strengthened
Since the beginning of the year, many policies have been actively taken, and the real estate development financing dilemma that the 21Q4 market is very worried about has improved significantly. In January, the credit "opening" was full of color, and the financing of real estate development improved significantly, which provided important financing support for the maintenance of above zero growth of real estate investment in the whole year. 1) The scope of management of real estate loan concentration has been reduced, and on February 8, the People's Bank of China issued a notice clarifying that loans related to affordable rental housing projects are not included in the concentration management, so that many commercial banks will have to significantly ease the pressure on developers to draw loans due to reaching the upper limit of concentration requirements. 2) M&A loans of housing enterprises are no longer counted in the "three red lines", and the annual work conference of the Ministry of Housing and Urban-Rural Development on January 20 focused on "resolutely and effectively disposing of the overdue delivery risks of real estate projects of individual head real estate enterprises", releasing the signal of dredging the financing blockages of the real estate industry chain from the bottom up and ensuring the completion and delivery. 3) January credit, social finance ushered in a full start, not only the total amount of new double exceeded market expectations, and the improvement of long-term loans in enterprises is mainly from real estate development loans, according to the 21st Century Economic Herald, it is expected that January real estate loans will increase by about 600 billion yuan, an increase of about 300 billion yuan more than the average monthly level in the fourth quarter of last year, of which real estate development loans increased by about 200 billion yuan, which is consistent with our analysis in the ""opening red" full of color, can be optimistic about the real estate - January financial data quick review. 4) The transaction of commercial housing has gradually stabilized and improved since mid-to-late January, although it has fluctuated after the Spring Festival, it is still better than the cool level of 21Q4. With the continuous dredging of credit financing blockages and the reasonable needs of residents to buy houses, real estate financing will gradually pick up, and real estate investment is expected to achieve positive growth of 1% throughout the year.
It is not possible to ignore the break-even constraint of infrastructure projects that "resolutely curb new hidden debts of local governments", and it is expected that the growth rate of generalized infrastructure and traditional infrastructure investment will rebound to about 6% and 3% respectively throughout the year, and it is difficult to see higher growth. The main constraints on infrastructure investment are not at the financing end, a good financing environment has emerged, the pattern of traditional infrastructure before high and low is very certain, but the current divergence lies in the magnitude, the Central Economic Work Conference's emphasis on "resolutely curbing new local government hidden debt" means that the fundamental discipline of asking infrastructure to cash flow and sustainability since the "new asset management regulations" will not compromise because the economy has downward pressure. Recently, the Guangdong provincial government proposed a target for zeroing out the existing hidden debt this year, and the Heilongjiang provincial government this week also emphasized that "resolutely curbing new government hidden debt" is consistent with the "penetrating supervision" requirements.
After the intensification of overseas stagflation, the demand policy may tighten more than expected, the downward pressure on external demand may come faster, while the domestic consumption data during the Spring Festival is flat, and the fiscal policy urgently needs to push a larger-scale individual tax reduction to effectively promote optional consumption. In January, the US CPI reached a new high of 7.5%, which may accelerate the tightening of overseas monetary policy, increase the downward pressure on external demand, and the recovery of domestic demand is particularly critical. Although the number of passengers sent during the Spring Festival from January 17 to February 10 averaged 25.04 million per day, which was significantly better than the same period last year 's lunar calendar (17.93 million), domestic tourism during the Spring Festival was only 251 million, a year-on-year decrease of 2%, which shows that residents travel more during the Spring Festival to visit their families, and service consumption is difficult to rebound significantly. In addition, this year's Spring Festival Ministry of Commerce only released petroleum products (18.2% year-on-year) and automobiles (11.3% year-on-year) two relatively good retail data, and did not focus on monitoring the overall retail sales of retail enterprises as the Spring Festival holiday was announced as usual. Since 22Q2, the pulling intensity of the completion of real estate in the early stage on optional consumption will weaken, and the inflation of industrial consumer goods may still lag behind the PPI at a high level, and the growth momentum of endogenous commodity consumption may slow down. Before the holiday, Premier Li Keqiang proposed to "take multiple measures to enhance residents' income and consumption capacity and release consumption potential", and suggested paying attention to the necessity of introducing a larger-scale individual tax reduction policy at the two sessions.
The carbon peak time of the steel industry has been delayed, steel production may improve, and the demand for real estate infrastructure investment tends to recover, and the need to increase coal supply and production has increased. On February 7, the National Development and Reform Commission and others issued the "Guiding Opinions on Promoting the High-quality Development of the Steel Industry", proposing that the steel industry "ensures that carbon peaks by 2030" is delayed by 5 years compared with the draft for comments, and some specific carbon reduction targets are also weakened or deleted, showing that in order to ensure the strong growth of industrial production, the total constraint on steel production may be eased compared with last year (crude steel production -3% year-on-year). Coupled with the recovery of infrastructure real estate investment demand, coal prices have risen sharply again recently. On February 9, the National Development and Reform Commission and the National Energy Administration interviewed some enterprises and demanded strict implementation of supply and price stability.
This week's economic data tracking: commercial housing transactions weakened after the holiday
Double limit and double control policy: do a good job in stabilizing the price of iron ore and coal
Global Macro Calendar: Keep an eye on China's inflation data
The content is excerpted from Shenwan Hongyuan Macro Research Report:
"Real Estate Financing Improvement, Steel Peak Delay, Coal Supply Strengthening- Shenwan Hongyuan Macro Weekly Report · Issue 152
Securities Analyst: Qin Tai / Tu Qiang
Research support: Jia Dongxu
Release date: 2022.02.13