Talking about the stock market
Investors do not have to be too pessimistic about the current stock market, the stock market correction, short-term risks have been released to a certain extent, which is conducive to the late development of the stock market.
Since the end of April, A-shares have shown a downward trend. In May, the opening of the door ushered in a major adjustment, which brought certain impact to the market’s popularity. The trend of A-shares has also affected the heartbeat of investors and even management. Even at the 2019 Annual Meeting of the China Association of Listed Companies and the 7th meeting of the Second Council, held on May 11, the Chairman of the China Securities Regulatory Commission Full of comments on the recent stock market trend.
Yi Huiman said that due to the external environment, the stock market has certain fluctuations, but in the long run, it is the economic fundamentals and the quality of listed companies that determine the market’s quality and development trend. The capital market is a barometer of the economy, which is mainly reflected in the quality of listed companies. Listed companies are the pillars and cornerstones that support the market, and are the benign pillars of promoting finance and entities. Without a good listed company, there is no good capital market. It is not difficult to see that Chairman Yi Huiman attributed the recent fluctuations in the stock market to “the impact of the external environment”.
In terms of the stock market turmoil that opened in May this year, it is more appropriate to attribute it to “the impact of the external environment”. Judging from the stock market correction since late April, it is actually normal and not surprising. First of all, from the history of the stock market, in most years, the spring market tends to come to an end in late March, and this spring’s market continues to adjust until late April, which means that this year’s spring market is much more than before. The years are strong.
Secondly, the recent stock market correction is also a necessary adjustment to the stock market’s rising market this year. It is conducive to digesting the risks brought by the previous stock market rise, and is also conducive to digesting the profitable disk brought by the previous stock market rise. After all, the Shanghai Composite Index rose from the low of 2,440.91 points at the beginning of the year to the highest point of 3,284.45 points in April, an increase of 34.72%, and there were many profit-making disks in the market. In this case, it is normal for the stock market to have a certain correction.
In addition, after the end of April, the disclosure of the annual report of the listed company has come to an end. The performance of most listed companies has been announced, and expectations are basically clear. At this point, it is normal for investors to take the opportunity to cash in part of the profits, and the stock market will also have some adjustments.
It is for these reasons that investors do not have to be too pessimistic about the current stock market. In the recent stock market correction, the Shanghai Composite Index fell by 13.69%, and the short-term risk of the stock market has been released to a certain extent, which is actually beneficial to the late development of the stock market. Not only that, but the expectation of the establishment of the science and technology board also brought a big boost to the stock market. It is precisely this kind of expectation that supports the development of changes in the stock market. Now, the opening of the board is getting closer and closer, and the A-share market will become more exciting.
In addition, according to MSCI’s plan, MSCI will increase the index of China’s large-cap A-shares in the index from 5% to 10% in May, and include the GEM A-shares in the MSCI index system with a 10% inclusion factor. This move will further increase the intensity of foreign capital flow into the A-share market. Due to the direction of foreign capital flow in the A stock market, the inflow of foreign capital is conducive to further boosting the A-share market. For this reason, the current stock market and the stock market in May are not pessimistic.
From the long-term perspective of the stock market, as Chairman Yi Huiman said, it is the economic fundamentals and the quality of listed companies that determine the market’s quality and development trend. Under this premise, there are still a few things that need to be addressed and addressed. For example, improve the IPO system, change the shareholding structure of newly listed companies, avoid IPOs from becoming the production machinery for restricted shares; regulate the system of reducing shares in restricted shares, avoid the stock market as a cash machine for shareholders who are restricted to sell shares; increase the violation of laws and regulations The punishment of behaviors, and effectively protect the legitimate rights and interests of small and medium investors.
□Pi Haizhou (a well-known stock critics)
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