Category: Money tips Release Date: 2006-07-14
Source: Beijing Securities Author: Qi Wu
Changyang pulled out this week index, which contributed heavyweight, Friday Sinopec share reform in the critical moment of suspension, with China Air, led by falling oil prices benefited from the successful filling of an example plate missing adverse conditions, thus easy to jump index on 1700 points, and quickly left the integer bit, trading volume significantly enlarge the market for heavyweight strength of the mentality of being hesitant because of the wealth effect of the emergence of increasingly strong. In my opinion, heavyweight's strength mainly in the following three reasons.
Value Regression
As the heavyweight generally a cyclical industry, by the obvious impact on the state's macro regulation and control, making its stock price has remained at low levels, prices have been varying degrees of underestimation, which lay in order to attract the size of the price-based capital approach.
From the semi-annual situation, the blue-chip performance is very conspicuous î–?fully reflects the mainstay of the role of blue-chip. Statistics show that the market value of the first 100 î–?of 100 blue-chip companies î–?the first half of this year's net profit reached 101.072 billion yuan, accounting for listed companies, 70% of the total net profit over the price of blue-chip return is sooner or later.
The role of model
Sinopec, as the first half of 2006 the leading stock index up company, its market position irreplaceable. In the current reform process has been more than half of stocks, stock indexes rose for the driving force for change because the stock changes are gradually coming to an end gradually reduced. In this context, Sinopec announced the share reform, and pay above the market average of the prices, coupled with the over-valuation that it does not thereby exposed to the pursuit of their bodies. Sinopec's strength once again, for as Yangtze Power, China Unicom, the prices of undervalued stocks such there is a clear demonstration effect, its impact on the index will also be due to the linkage to other blue chips were further amplification.
If we say that the overall heavyweight Sinopec's flagpole, then the China Merchants Bank is in the Quotes This time, we can not fail to mention the other sub-leading stocks. It can be said in its lead, financial stocks has become a heavyweight in this performance of the most dazzling star. Since the September 4 G announced its H shares of China Merchants offering inquiry interval since the higher prices caused by its domestic A share price soaring, as of Friday, in just nine trading days, the stock's closing price in dollars from 8. 49 yuan rose to 9.34 yuan, or up to 10.01%! Since April 2005 a record high. In the meantime, Minsheng Bank, Shanghai Pudong Development Bank is also strengthened side by side, showing a steadily climbing stock price. Financial sector's strength, of course, with the long-term appreciation trend of the RMB, as well as China's economy has maintained a growth rate higher than the global economy and other macroeconomic factors, but no one can deny that it comes as China Merchants Bank H shares of high-priced release, is triggered by a strengthening banking stocks fuse. Has been targeting the mainland banking stocks is significantly lower compared with the Hong Kong equities. This time China Merchants Bank's high-profile issue, to a certain extent, to promote A-share market is beginning to bank shares trade position, with a similar business constitute the joint-stock banks took prices back from the road, made an important contribution to the index. And we are pleasantly surprised to see that, like G Unicom, the values of Air China's shares are significantly undervalued stocks gradually become the leading third echelon!
Institutional Innovation
Will soon enter the implementation phase of the margin trading business, to a certain extent, to stimulate the heavyweight strength. Index heavyweight industry generally has a prominent position, its anti-risk, especially the risk of macro-control in the industry is second to none. Its stable performance, making the market as margin trading of its subject matter is full of expectations, which to some degree, on into the increased market demand. From overseas market, the blue-chip in the margin trading business, leverage is also quite pronounced. In Hong Kong, the highest proportion of margin trading of bank stocks î–?such as HSBC Bank in Hong Kong stock market î–?can get up to 80% the proportion of margin trading. Can be seen in the new trading system, has a blue-chip can greatly enhance the efficiency in the use of funds.
Another major event is the establishment of China's Metal Exchange, marking the launch of stock index futures has been no turning back. As the A-share market a very limited scale, heavyweight's every move on the stock impact is huge, investors must have the Bank of China to the stock market impact in mind. The introduction of stock index futures in the current market environment, given a special position in the market heavyweight. For institutional investors, the former heavyweight asset allocation may be just an object, it is difficult to institutional investors excess returns on investment. However, with the stock index futures era, heavyweight value will not only reflected in the book value of the fluctuations, but also reflected in the impact of stock index futures to bring the expected return on investment. In fact, from the medium-term situation, a lot of funds for the reduction in the domestic varieties of the same time a strategic, QFII funds are in the large-scale intervention, in particular, seriously underestimated the price of the heavyweights, this operation will become more apparent contrast. One can imagine, institutions for the heavyweight battle will be as close to stock index futures further warming.
Overall, the financial innovation and the introduction of derivatives, will greatly enhance the attractiveness of heavyweight investors will get some market opportunities for this, but in the final analysis, and valuation to enhance the already limited space compared to the early stage of hot stocks, heavyweight excellent price-performance ratio is the result of its recent active critical factor in short-term opportunities for investors concerned about the same time or should it be an objective and calm attitude to look at heavyweight market performance.
