Morgan Stanley-China Financials Assessing the Impact of the New Monetary F...-109456285

MUpdateChinaFinancials|AsiaPacificAssessingtheImpactoftheNewMonetaryFrameworkMorganStanleyAsiaLimited+RichardXu,CFAEquityAnalystRichard.Xu@morganstanley.com+8522848-6729ChiyaoHuangEquityAnalystChiyao.Huang@morganstanley.com+8523963-4624BerylYangResearchAssociateBeryl.Yang@morganstanley.com+8523963-2224ChinaFinancialsAsiaPacificIndustryViewAttractiveRelatedreports:ChinaFinancials:Junedata:Moreevidenceofashiftawayfromquantitativemonetarytarget(12Jul2024)ChinaFinancials:AnotherfirmPBOCactiontosupportratesandmoveawayfromquantitativetargets(8Jul2024)ChinaFinancials:PBOCactiontosupportratelevelsinChina;industryviewremainsAttractive(2Jul2024)ChinaFinancials:Furthershiftfromquantitytorateorientedmonetarypolicyshouldbenefitbanks(20Jun2024)WebelievethenewmonetarypolicyframeworkeffectivelyendstheChina-styleQEandwillpavethewayformoremarket-orientedratepricing.Webelieveitwilldrivemorerisk-orientedloanpricingandbetterforbankswithbetterriskmanagement.Notableshiftinmonetaryframeonloanvolumeguidanceaswellasloananddepositrates:SincethePBOCgovernorPanGongshenglaidoutthepathofmonetaryframeworktransition,wehaveseenamajorshiftinoverallmonetarypolicyframework.First,windowguidanceonloangrowth,includingwindowguidanceontypeofloanssuchasSMEandindustrialloangrowth,hasindeedbeende-emphasized.Second,PBoChasestablishedseven-dayreporateasth...