China September TSF rebounds

Total social financing (TSF) shows a strong pickup in September. TSF registered at CNY1.3trn in September, up from trn in July (or 14.5 % y/y). Month on month, the improvement in TSF was led by a notable increase in new RMB loans to the real economy, which climbed to CNY1039bn from CNY776bn in August. 

Among other components of the TSF, off-balance sheet lending expanded by CNY100bn. Corporate bond issuance continued to improve to CNY373bn (August: CNY288bn), while equity financing fell again to CNY35bn in conjuncture with the bearish stock market in September. 

On a y/y basis, TSF stock growth remained flat at ~12% in September, and so did the new loan (15.4% y/y), while broad money (M2) growth moderated to 13.1% y/y from 13.3%, likely due to capital outflows. The FX reserve posted a decline of USD43bn to trn, notes Barclays.