Chapter 217: Today’s Banks Are Not My Type
Tuesday, March 26, 2024.
Just like yesterday, after sending the child to school, Li Feng leisurely strolled to the master's room.
Turning on the computer, he began to browse yesterday's news.
There was so much important news yesterday.
What first caught Li Feng's attention was the central bank's statement:
"We are able to achieve the expected growth target of around 5% for the whole year,"
"Since the beginning of this year, monetary policy has increased its counter-cyclical adjustment efforts,"
"In the future, there will still be ample policy space and a rich reserve of tools,"
"Maintaining price stability and promoting a moderate price recovery are important considerations in formulating monetary policy."
"Positive signals have emerged in the real estate market, which has a solid foundation for long-term healthy and stable development. Fluctuations in the real estate market will have limited impact on the financial system..."
Pan's position is equivalent to that of the Chairman of the Federal Reserve. His statement is relatively important and basically represents the attitude of the top leaders in the financial field.
Therefore, no matter what he says or does, we need to carefully and repeatedly ponder it.
Because of his identity, his speeches in public are carefully prepared and considered many times, and are not random.
After studying his speech, Li Feng found that in terms of monetary policy, when he mentioned countercyclical regulation twice, he did not talk about cross-cycle regulation, nor did he say that there is still sufficient policy space and a rich reserve of tools.
Countercyclical, to put it simply, means flooding the market with money to fight against the economic cycle.
To put it simply, cross-cycle means predicting your predictions, releasing water in a restrained manner, and expanding production capacity in a restrained manner.
From this, it can be seen that monetary policy will remain loose for some time to come.
Moreover, Li Feng also noticed a relatively new concept: "Promoting a moderate recovery in prices should be an important consideration in formulating monetary policy."
The CPI target set at this year's Two Sessions is 3%.
This was the goal for several years before, but due to the disruptions caused by the pandemic, this number was often not achieved.
However, the situation this year is somewhat different. Last year, CPI showed negative growth for three consecutive months. Now, promoting a moderate recovery in prices must be an "important consideration."
It's quite intriguing.
At the very least, this indicates that monetary policy will be relatively relaxed this year, and the degree of monetary easing will continue to increase in the future...
Money is like water and the stock market is like a boat.
Only when the water rises can the boat rise.
The main tone of continued loose monetary policy this year can be said to have directly blocked the downward space of the stock market, and the future is promising.
Li Feng felt relieved and continued to browse other important news.
On March 25, the yield on 10-year Treasury bonds was 2.3151%, and the yield on 30-year Treasury bonds fell below 2.4962%.
There are reports that public funds are required not to participate in speculative investment targets.
And there is also China Merchants Bank’s 2023 annual report.
China Merchants Bank is a benchmark in the banking sector. Studying its annual report is very important for studying the banking sector, grasping the financial cycle, and judging the position of the overall stock market.
Li Feng downloaded a copy of China Merchants Bank's 2023 annual report and began to study it carefully.
Among them, its operating income was 339.123 billion yuan, a year-on-year decrease of 1.64% compared with 2022, and its net profit income was 146.602 billion yuan, a year-on-year increase of 6.22% compared with 2022.
During the interest rate cut cycle, China Merchants Bank's interest margin continued to narrow, resulting in net interest income.
In 2023, it will be only 214.669 billion yuan, a year-on-year decrease of 1.63% compared with 2022. The fee income will also decrease by 10.78% year-on-year. The non-interest income will be 40.346 billion yuan, a year-on-year increase of 25.01% compared with 2022.
The non-performing loan ratio was 0.95%, down 0.01 percentage point from the end of last year; the provision coverage ratio was 437.70%, down 13.09 percentage points from the end of 2022; the loan provision ratio was 4.14%, down 0.18 percentage point from the end of 2022.
The core capital adequacy ratio remains as worry-free as ever, reaching 13.73%, and there should be no equity financing in the future.
It seems that even China Merchants Bank, a retail benchmark, is having a hard time during the interest rate cut cycle.
To be very objective, against the backdrop of declining revenue, China Merchants Bank was able to achieve a 6.22% growth, and a large part of its profits came from the decline in provision coverage ratio.
To put it bluntly, it means overdrawing previous provision reserves to adjust profits.
However, perhaps in order to boost the stock price or perhaps in response to the national call, China Merchants Bank increased its dividend rate to 35%, with a dividend of 1.972 yuan per share, a dividend yield of 6.29%, and a PE of only more than 5 times.
Perhaps stimulated by the unexpected dividend of China Merchants Bank, China Merchants Bank began to rise as soon as it opened, and led the banking sector upward, rising by more than 4% at one point, and has risen by 16% so far this year!
"The main upward trend of China Merchants Bank has begun!" someone cheered in the stock forum.
Li Feng shook his head and closed the annual report of China Merchants Bank.
At present, although the banking sector is very cheap, with a PE ratio of about four times, the dividend rate is also relatively high, around 5%, which is quite attractive.
However, in the interest rate cut cycle, the banking sector is under overall pressure and expectations are very unclear. For large funds, buying at this time is indeed unwise from the perspective of profit.
Moreover, for a sector as large as the banking sector, if one wants to launch a major upward trend, it will require a lot of capital. It will be difficult without market synergy and improvement in the sector's overall profit expectations.
Therefore, whether from the overall trend or from the sector perspective, the banking sector is not an ideal choice at present.
Li Feng collected his thoughts and continued watching the market.
Today, the banking, liquor and financial sectors as a whole strengthened, while the kerosene and nonferrous metals sectors, which collectively rioted yesterday, collectively weakened. Theme stocks all retreated, and stocks such as Ai Ai Precision, Boxin Holdings, and Dali Pharmaceutical all hit the limit down.
After the Shanghai Composite Index opened at 3026 points, it began to fall all the way. After several twists and turns, it fell to 3014.90 points in the afternoon.
The battle to defend 3000 points is about to begin again.
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