China's new network client beijing january 6(reporter li jinlei) on january 6, the central bank for the first time in the new year full-scale landing. The reduction in the release of long-term funds about 800 billion yuan, such a large red envelope, who will benefit from it?
On January 1, the central bank decided to cut the reserve requirement ratio for financial institutions by one percentage point (excluding financial companies, financial leasing companies and auto finance companies) on January 6,2020.
The central bank said the downgrade was a full-scale one, reflecting counter-cyclical regulation, releasing more than 800 billion yuan of long-term funds, effectively increasing the stable source of funds for financial institutions to support the real economy, reducing the cost of funds for financial institutions to support the real economy and directly supporting the real economy.
It was the central bank's fourth cut since 2019. Earlier, in January 2019, the central bank announced a full one-point cut; in May 2019, the central bank decided to lower the reserve ratio of RMB deposits of rural commercial banks serving the county to the level of rural credit cooperatives. In September 2019, the central bank announced a full cut of one percentage point and a targeted one-point cut.
The northeast securities study noted that liquidity pressure in january was significantly higher than in previous years due to early issuance of local special debt, moving forward during the spring festival and paying taxes. Demand for large amounts of cash will also move forward as a result of the Spring Festival's advance to January 2020, leading to a sharp increase in M0 and cash on hand in January, resulting in tighter interbank liquidity. Therefore lower reserve ratio release liquidity is a more reasonable choice.
The head of the central bank said the downgrade supports the development of the real economy. This cut has increased the source of financial institutions, large banks to sink the focus of service, small and medium-sized banks to focus more on the main responsibility of the main industry, the use of reduced funds to increase support for small and micro, private enterprises.
It is reported that in this overall reduction, small and medium-sized banks operating only in the provincial administrative region, rural commercial banks serving the county, rural cooperative banks, rural credit cooperatives and village banks and other small and medium-sized banks have received more than 120 billion yuan in long-term funds, which is conducive to enhancing the capital strength of small and medium-sized banks serving small and small, private enterprises based on local and returning to their origin.
At the same time, the reduction in the cost of bank capital about 15 billion yuan a year, through bank transmission can reduce the actual cost of social financing, especially small and micro, private enterprises financing costs.
Zeng Gang, deputy director of the National Institute of Finance and Development, said the cut would allow liquidity to remain reasonably plentiful, reduce the cost of capital for banks, and the cost of financing for the real economy is expected to fall further, while easing the monetary policy transmission mechanism to guide funds to small and micro enterprises and private enterprises, thus helping to stabilize growth.
Affected by the news of the cut, January 2,2020, the first trading day, A-share welcome to open the door. The Shanghai index rose more than 1 per cent to close at 3,100, an eight-month high, while the Shenzhen index and the gem were up more than 2 per cent for an 18-month high.
Guotai Junan Securities believes that the reduction in the care of capital, help local debt issuance, conducive to economic stability, and enhance investor confidence, support equity market center up, the stock market continued spring restless market probability.
Tang jianwei, lead researcher at the bank of communications's financial research center, said the first day of the new year cut would further strengthen expectations of policy easing and would significantly boost risk appetite and long-term sentiment, and short-term capital markets remain to be expected.
Looking ahead to the stock market in 2020, Citic said A-share earnings growth would pick up steadily after bottoming out in 2020. In the macro-economic decisive, capital market reform, corporate profit recovery environment, A shares are expected to usher in 2-3 years of small Kang Niu.
The reduction is not for real estate, but to reduce the cost of corporate financing. However, from the historical point of view, as long as the cut, for real estate is definitely good, can ease the financial pressure. The cut would certainly ease the financial pressure on real estate companies and provide relatively stable credit prices for homebuyers.
Mr. Zhang said the cut was certainly not aimed at gasping for air for the property market, but it was hard to avoid its benefit. Real estate is unstable, and it is difficult for the economy to achieve steady growth. The financial stability brought about by the downgrade is conducive to the stability of the real estate market. The market does have the possibility of reviving a stable little spring in 2020. However, the property market trend in 2020 mainly depends on the local real estate credit line and talent policy strength.
Yan Yuejin, director of research at the Yi Ju Institute's think tank center, said the financial environment in the real estate market is expected to be further relaxed, especially in areas such as real estate development loans and personal mortgage loans, which will help drive more bank loans into the market and have a more positive impact on the property market.
Mr. Yan said there had been an increase in liquidity in the market after the cut, which is expected to lead to a further cut in the LPR, the lending market's quoted rate, and a possible lower mortgage rate, which would reduce the cost of home purchases. At least january can stimulate real estate transactions, this time to be alert to prices and other possible rise.
Mr Tang said the cut had no direct impact on the property market. Of course, the overall market liquidity loose, the real estate industry financing environment may also improve.
The central bank said the cut was a hedge against pre-chun festival cash, and that the total liquidity of the banking system would remain basically stable, flexible and moderate, not flooding, reflecting a scientific and prudent grasp of the counter-cyclical adjustment of monetary policy, and the prudent monetary policy orientation has not changed.
Wen Bin, chief researcher at Minsheng Bank, said that the overall reduction insisted on a sound monetary policy, through the release of low-cost long-term funds to replace short-term high-cost funds, to maintain reasonable liquidity, liquidity structure more optimized.
Tang pointed out that the central bank is less likely to cut interest rates in the first quarter from a more scientific and robust perspective on the use of policy tools. Maintaining the central bank's cut by 2-3 percentage points in 2020, and the mid-term lending facility (MLF) operating rate for the year would cut its judgment by 25-30 BP. (end)