Wang Qing et al.: It is expected that the main financial data will enter a round of volatility upward process

　　Zhongxin Jingwei client August 12 Title: "Wang Qing et al.: It is expected that the main financial data will enter a round of fluctuation upward process"

　　Author Wang Qing (Chief Macro Analyst of Oriental Jincheng) Feng Lin (Senior Analyst of Oriental Jincheng)

　　According to data released by the central bank, RMB loans increased by 1.08 trillion yuan in July, an increase of 90.5 billion yuan over the same period last year; the balance of RMB loans grew by 12.3% at the end of July, unchanged from the end of the previous month and 0.7 percentage points lower than the same period last year.

　　In July 2021, the increase in the scale of social financing was 1.06 trillion yuan, 636.2 billion yuan less than the same period last year; the stock of social financing scale at the end of July was 302.49 trillion yuan, an increase of 10.7% year-on-year.

　　At the end of July, the balance of broad money (M2) was 230.22 trillion yuan, an increase of 8.3% year-on-year, and the growth rate was 0.3 and 2.4 percentage points lower than the end of the previous month and the same period of the previous year, respectively; the balance of narrow money (M1) was 62.04 trillion yuan, an increase of 4.9% year-on-year, and the growth rate was 0.6 and 2 percentage points lower than the end of the previous month and the same period of the previous year, respectively.

　　Specifically, the landing of the RRR cut in July directly led to the willingness and ability of banks to lend, but the insufficient demand for loans restricted the expansion of credit, so rmb loans in the same month only increased slightly by 90.5 billion yuan year-on-year, and there was a relatively obvious bill impulse phenomenon. From the structural point of view, the main reason for the lack of loan demand is that under the background of the cooling of the property market, the demand for residents' loans has shrunk, and at the same time, the medium- and long-term loans of enterprises in the month increased by about 100 billion yuan year-on-year, indicating that the demand for corporate loans has also weakened.

　　In July, new RMB loans increased by 1.08 trillion yuan, an increase of 90.5 billion yuan year-on-year, supporting the growth rate of loan balances at the end of the month was flat at 12.3% at the end of the previous month, further confirming our judgment that the current credit growth rate has basically been in the bottom area of this round of "tight credit". The comprehensive RRR cut in July directly led to an increase in banks' willingness and ability to lend, but the expansion of credit was constrained by a weakening of credit demand – the loan demand index in the second quarter was 70.5%, down 6.9 percentage points from the first quarter.

　　Year-on-year, the main reason for the year-on-year increase in RMB loans in July is that bill financing and non-bank loans have increased significantly compared with each other. Among them, bill financing increased by 279.2 billion yuan year-on-year, combined with a sharp decline in bill interest rates in the second half of the month, showing that there was a bill impulse phenomenon in bank credit after the RRR cut landed, confirming the current lack of credit demand. This is reflected in:

　　First of all, under the background of increasing real estate regulation and control, the property market cooled down significantly in July, and the demand for residents' mortgage loans shrank accordingly, while the supervision strictly investigated the flow of short-term loans from residents such as consumer loans and operating loans into the real estate basin, which also limited the demand for short-term loans for residents. Secondly, in July, both short-term loans for enterprises and medium- and long-term loans for enterprises increased less than that year-on-year, indicating that the demand for corporate loans has also weakened. Next, we need to focus on the sustainability of the year-on-year contraction of medium- and long-term loans of enterprises and its impact on the rapid recovery momentum of manufacturing investment.

　　In July, social financing increased less than that of the previous month and the same period last year. Government bond financing became the main drag on the year-on-year increase in social financing in the month.

　　In July, the new social financing was 1.06 trillion yuan, an increase of 2.61 trillion yuan less than that of the previous month, and the scale of the year-on-year increase also reached 632.8 billion yuan. Affected by the weaker scale of new additions than the same period last year, the year-on-year growth rate of social financing stock at the end of July fell to 10.7% compared with the end of the previous month.

　　From the sub-point of view, in addition to the RMB loans invested in the real economy increased by about 1.48 trillion yuan less than the previous month and 183 billion yuan less than the same period last year, the new government bond financing and off-balance sheet bill financing also shrank. In July, the off-balance sheet bill financing was reduced year-on-year, except for the conversion of off-balance sheet notes to off-balance sheet and off-balance sheet due to the amount of bill financing, which was also related to the large maturity.

　　The decline in M2 growth at the end of July was directly due to the weakening of loans in the month affecting deposit derivation; at the end of July, M1 growth rate fell by 0.6 percentage points, and the cooling of the real estate market in the month was the direct cause, while the activity of the real economy may also decline.

　　At the end of July, the year-on-year growth rate of M2 fell slightly by 0.3 percentage points from the end of the previous month to 8.3%, which was lower than market expectations. The direct reason was that RMB loans were weaker in the month, and deposit derivation slowed down accordingly. This month, the year-on-year growth rate of M2 fell, and the growth rate of the broad money supply hovered at the bottom, indicating that there is still no clear upward inflection point in the current round of "tight credit" process.

　　In terms of deposits, an important feature of July is that residents' deposits have decreased significantly, rather than silver deposits have increased by nearly one trillion yuan, which is in line with the general law of the return of resident deposits to non-bank institutions after the bank's quarter-end assessment. The change in corporate deposits in the current month from rising to falling is directly related to the year-on-year repair of corporate bond financing in the current month, and also has a certain relationship with the year-on-year increase in corporate credit, including bill financing.

　　At the end of July, M1 growth fell 0.6 percentage points to 4.9% compared to the end of the previous month. In our view, one direct reason was the significant cooling of the housing market during the month. Historical data shows that there is a strong correlation between the growth rate of M1 and the heat of the real estate market. In addition, the decline in the official manufacturing and non-manufacturing PMI in July was also part of the reason for the downward trend of M1 growth.

　　We expect that the boost effect of the central bank's RRR cut on credit and social finance will be reflected in August, and it is expected that the financial data in August is expected to fully recover, and the "tight credit" process since the beginning of the year is nearing its end. This means that the July financial data is at the bottom of the current round of "tight credit" process. Next, with the fine-tuning of macro policies in the direction of stable growth, major financial data such as credit, social finance and M2 growth rate will enter a round of fluctuation upward process. (Zhongxin Jingwei APP)

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