The Central Bank Dropped 0.5 Percentage Points In The Year To Come. How Did The Economy Go In 2020? Listen To Expert Analysis

To support the development of the real economy and reduce the actual cost of social financing, the people's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.5 percentage points in January 6, 2020, excluding financial companies, financial leasing companies and auto financing companies. The central bank said that it will continue to implement prudent monetary policy, maintain flexibility and moderation, not flood irrigation, balance internal and external balance, and maintain a reasonable and abundant liquidity.

The central bank said that the RRR is a comprehensive reduction and release of long-term funds of about about 800000000000 yuan, effectively increasing the financial institutions' support for the stable sources of funds for the real economy, reducing the financial cost of financial institutions supporting the real economy, and directly supporting the real economy. This reduction will help to realize the growth of monetary credit and social financing scale and economic development. The RRR will earn about 120000000000 Yuan for small and medium banks. At the same time, the cost reduction of the bank will cost about 15 billion yuan a year.

The central bank also said that the reduction will be a hedge against the cash flow before the Spring Festival. The total liquidity of the banking system will remain basically stable and remain flexible and moderate. Since 2019, the central bank has dropped three times. Including the implementation of the comprehensive reduction in January two times, in May began three times the implementation of the directional drop, September began the comprehensive reduction and the implementation of two directional reduction. Experts said that in the future, the deposit growth rate of the banking system is less than 4-5 percentage points of the loan growth rate.

Lian Ping, director of the China Banking Association's Industry Development Research Committee, For the bond market tends to be active, making the risk of the bond market more controllable, it will also play an active role. At the same time, for the stock market, how to maintain a reasonable liquidity situation will also play a positive role.

Wu Xuan, chief market analyst of debbond fund. The central bank implemented the annual drop of 0.5% on New Year's day, which is a positive response and implementation to prime minister Li Keqiang's earlier premise and reduction. The release of 800 billion liquidity will further improve liquidity expectations, effectively meet the demand for funds before the Spring Festival, and indirectly reduce the financing costs of enterprises; on the other hand, as the quasi time node is slightly earlier than the market expectations, it is expected to be good, which will greatly enhance market confidence and boost A shares to achieve a good start and accelerate the climb. After this comprehensive reduction, the basic orientation of this year's monetary policy has been adjusted. In the later stage, it is expected to continue to implement targeted reduction, which will lead to a clearer policy expectation for the market, and will help A shares to deduce in depth in the first quarter.

How can we get to the stock market in the coming year?

To support the development of the real economy and reduce the actual cost of social financing, the people's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.5 percentage points in January 6, 2020, excluding financial companies, financial leasing companies and auto financing companies. The central bank said that it will continue to implement prudent monetary policy, maintain flexibility and moderation, not flood irrigation, balance internal and external balance, and maintain a reasonable and abundant liquidity.

CITIC Securities chief strategist Zhang Yulong It is believed that this reduction is in our expectation. Judging from the time limit, it is on the first day of the new year. In 2018 and 2019, the same reduction measures were also adopted. It is common to add liquidity before the Spring Festival. From the point of view of the drop in strength, this reduction is a comprehensive drop in the right direction, reduce the reserve 50bp, release 800 billion of liquidity. This is more powerful than before.

There are three important goals in 2020: first, increase the intensity of counter cyclical adjustment. In 2020, the goal of doubling will be completed. Steady growth has become an important task. Neutral and flexible monetary policy and active fiscal policy are important tasks. Second, the cost of changing the interest rate of a hedge bank's loan interest rate. Starting from March 2020, the benchmark of bank stock loan pricing will be converted. If converted to LPR, with the decline of LPR, bank profits will be negatively affected. By reducing the opportunity cost of banks, the effect of hedging loan interest rates changing anchor is reduced. Third, January is still the peak of the open market operation and tax payment. It is still of great significance to supplement the liquidity of commercial banks.

We expect that in 2020, the central bank will take more measures to reduce the cost of financing, such as lowering the MLF and so on, so as to ensure that liquidity is flexible and moderate, and continuously reduce the financing cost.

In 2020, we thought that the capital market showed a narrow fluctuation and gradually increased its characteristics. Today's market performance is consistent with the characteristics of "cycle + finance" recommended by us since November 2019. This is also a direct benefit from the industry. We expect that the reverse cyclical regulation will dominate the whole spring Market in 2020, and the cyclical industry represented by the financial sector, real estate and infrastructure will continue to dominate.

As the market spreads, the growth sector represented by technology will rise again after its performance has been confirmed. Overall, the market performance in 2020 will be even more amazing, and even the bull market will be the main wave.

The performance of the market will be more stable in 2020. The counter cyclical adjustment will promote the recovery of the economy into a short cycle, and monetary policy will remain neutral and stable. This is the most favorable macroeconomic environment for the A stock market. Therefore, we have made an important judgement of the bull market.