Will there be a "lending boom" next year?
The possibility of a credit "good start" next year is relatively small. Zhongtai Securities believes that the central bank's guidance on "smoothing credit issuance and improving the efficiency of existing loans" has already been reflected, as evidenced by the seasonal increase in bill rates, indicating that the effect of "smoothing credit scale" has been demonstrated. Considering the high base in January 2022 and the impact of the Spring Festival, the possibility of a good start next year is reduced. The good start is usually led by medium and long-term loans to enterprises, so attention should be paid to infrastructure construction and manufacturing investment demand.
The "New Year's Credit Boom" refers to the principle of "early investment, early returns," where January is typically the month with the highest credit issuance by banks. Over the past five years, there has been a consistent "New Year's Credit Boom," with a continuous year-on-year increase in new credit. However, China Thai Securities believes that the possibility of a credit boom next year is relatively low for the following reasons:
First, since November of this year, the central bank's guidance on credit has included "smoothing credit issuance and improving the efficiency of existing loans." The seasonal increase in bill rates in December may indicate that the effect of "smoothing credit scale" has already been reflected.
Second, the requirement for credit to "take the lead" in early 2023 means that the characteristics of the "New Year's Credit Boom" in 2023 will be distinct, with a larger base of new credit. Considering the negligible impact of the Spring Festival effect, the possibility of a credit boom next year is reduced due to the high base in January.
Third, the New Year's Credit Boom is usually led by medium and long-term loans to enterprises. In terms of the source of infrastructure projects, attention should be paid to the release of detailed rules for the construction of dual-use infrastructure for civil and military purposes. In the manufacturing sector, the significant rebound in investment demand may still require further waiting.