Category: Money tips Release Date: 2007-05-05
Source: Precision Industry Shenglong
Inexplicably postponed due to price and other indicators released, triggering the chips on the turnover rate is not low is more relaxed Thursday by raising interest rates affect stocks in the largest quoted financial and real estate stocks fell fallen sharply. Between the two cities traded 296 billion yuan, a record high. This fall and 2.27 compared to the same point is to have a very heavy fall, are in the message surface vacuum occurs; difference is that now far exceeds the degree of market madness of the time, and the policy of large invisible pressure was clearly ahead of time, much more.
The current climate of speculation there are signs the market a strong exception: First, the excessive speculation in annual, quarterly; second is to continue to subject matter, concepts, stock speculation; third, flying a variety of sources. These messages are indicative of the mentality of investors impetuous. While the tape of the day a huge amount of additional funds under the impetus will likely continue to rise, and hit a new high. However, the possibility of short-term market correction is increasing, which most likely is a bad policy, caused by surface. One-quarter of the financial data has just been introduced, the management may increase the tight regulation and control efforts, the future is what is in the macro-control-intensive period, when investors should remain cautious, the operation recommended to hold their own knowledge, are familiar with and have confidence in their stocks.
A climate of speculation and the stock market strong
The recent performance of the market, although as expected, but also deepened concerns about the industry analyst. On the one hand, you can see is the stock's rapid rise in the amount of days of the transaction and the number of A shares of new accounts continue to record high; the other hand, market valuation and AH stocks rising premiums, turnover remained at high level. While in 2006 and this year, a quarter of the performance of listed companies to obtain explosive growth is no longer suspense, but recent annual report and quarterly market hype, resulting in stock out of the rate of increase has been significant improvement in fundamentals. Notice at the beginning of the performance, the market performance of listed companies is expected to have been greatly improved. Although the performance of listed companies last year, won the explosive growth, but actually to be published in slightly below expectations. Even taking into account one-quarter performance of listed companies are likely to exceed expectations, we can not support the recent rise in the stock market so quickly.
And, if on behalf of the Shanghai and Shenzhen 300 constituent stocks of blue chip stocks, non-constituent stocks of the Shanghai and Shenzhen 300 shares on behalf of low-profit and losses in stocks, according to annual report data, performance of blue-chip stocks higher than market expectations, while the meager profits and losses in shares of stock performance to be substantially lower than the market expected. But looking at the market characteristics index, this year, low-profit shares, the cumulative loss of stock returns to be significantly more than blue chip stocks. Even though nearly a month transferred to the hot market, blue chips, blue chip stocks are still running lose meager profits and losses in shares of stock.
Higher power come from: performance or liquidity?
According to foreign stock market development experience, a healthy stock market is the most important pillars of a strong fundamentals. In the United States, the basic earnings growth in the market over the past 50 years the main growth driver, especially the EPS indicator is the most important factor affecting stock prices. The only exception was in science and technology, media and the Internet bubble period, the Standard & Poor's 500 index rose sharply from the fundamentals, which resulted in the next two years Shenfutiaozheng.
A historical study share market, and found, corporate profitability is not the main engine of growth stocks in order to EPS and ROE indicators reflect fundamentals and the Shanghai Composite Index in most years is not consistent with the trend. Although last year obtained a larger corporate fundamentals improved, but the Shanghai Composite Index rose to a greater extent.
Another market is often mentioned by the mainstream view is that the trade surplus has led to a large number of purchase, thus increasing liquidity has led to revaluation of asset prices, pushed up the stock market. But the study of history, since the current round Quotes excess liquidity lower than a lot of years, especially in the central bank that a year or more, through the issuance of central ticket and to raise the deposit reserve ratio, has obliterated a large number of Waihuizhankuan. However, the excess liquidity to some extent with the movement of the Shanghai index is consistent, especially in recent years and more particularly a show which is an important factor in promoting the market rally.
The decomposition of excess liquidity on the show, M1 growth and the stock market and the stock was highly positive correlation between movements, but also ahead of market trends with predictive effect. And the diversion of household savings deposits, M1 is the most important transmission mechanism play a role. If the stock market was performing well, will attract a large number of people cut their savings deposits, and the new diversion of funds is to further drive the market higher. But once the stock is high and the decline in household savings deposits also reduce the diversion to promote the stock market continues to fall.
Individual investors led the stock market
The diversion of household savings deposits, the impact on the stock market so large, owing to the structural imbalance of China stock market investors, individual investors due to the strength too strong. For a long time, retail investors are the main stock market, institutional investors would seem to form a single, weak. This abnormal structure is an important factor in market instability.
From a practical point of view, the market power of individual investors are gradually increasing. On the one hand, A new account number of shares continuously hit new highs, a substantial increase in sales department customer margin, indicating more retail investors to participate in the secondary market up; other hand, while increasing the size of the fund distribution, but also the individuals who represent a large purchase part, and since last year, the fund holders in the rising proportion of individual investors. Although the Fund belongs to institutional investors, but the redemption pressure also makes the actual investment behavior of individual investors are affected. The current estimate of A shares held by individual investors, the market value of the ratio above 60%, and this value continues to rise.
Again, although the Chinese stock market has experienced a more than a year of development, the stock market has been substantial growth, but retail investors can buy only the real total market value of 1 / 4 of the outstanding shares. As of the end of the year three savings deposits of residents with all A shares in circulation with nearly 5 times more than market value. As the level of China's long-term deposit interest rates low, it is foreseeable that as long as the money-making effect of the stock market still exists, it will certainly attract more savings deposits diversion lead the stock market, which will further push up stock.
Individual investors because of its inherent flaws, making obsolete their investment philosophy, risk taking ability is poor, its "chase sell into" in a very serious problem. A unit study on the new account number and card index was found to maintain the trend of their amazing consistency. This means that, and the prices better, the more and more new investors tend to enter the market; and Quotes bad, quite the contrary. While speculation on the market are often initiated by other investors, but it is due to the powerful forces of individual investors, as well as its non-rational, enabling them to become active or passive participation in market speculation and to enlarge its main strength.
Learn from history, whether it will repeat the same mistakes?
In early 1999 to mid 2001, the Shanghai index gained 1065.82 points from the lowest to the highest point of 2233.59, during which the market a lot of similar features and contemporary. First of all, from the beginning of 1999, M1 growth rate of M2 growth rate, indicating diversion of bank deposits, of which the most important is the diversion of household savings deposits. In the M1 growth rate of M2 growth rate lower than the time when the beginning, it was exactly a bull market has ended. Secondly, along with the Shanghai Composite Index rising, the market valuation is constantly pushed to the highest point, ultra-high 60 times earnings. Finally, the outstanding performance of the stock market has also attracted a large number of new investors enter the market, in the number of accounts opened in March 2001 the growth rate reached the highest level. And in the stock market falling, the average daily number of accounts opened gradually reduced. This is a bull market existed for more than two years, followed by the long bear market that is more than four years.
This is a Quote fully confirmed the above-mentioned securities analysts. In this process, the price-earnings ratio rose sharply in the near future for more than 60 times, an indication of serious speculative bubbles. U.S. economist Robert Shiller of the speculative bubbles, from creation to collapse of the explanation is that amplification mechanism at work: In the past the price of increased investor confidence and expectations, these investors to further drive up stock prices, thereby attracting more investors, to promote this cycle continue. But once the stock market fell at a high level, capital outflow of the stock market often leads to a further slide in the final outcome is the collapse of the bubble. Among these, the original trigger factors are often a very small face bad news.
The current stock market has shown the existence of speculative bubbles, the most important indicator to measure the rising valuation, in addition to the rampant speculation of the market. Continued diversion of household savings market, as well as a large number of new daily A-share accounts, should arouse enough attention to analysts. If we say that the current market seven years ago, with different words, it is among the analysts in the pre-judgment of the report, the listed company's profit in the coming years will continue to maintain relatively high growth, which is supported by the current round of the bull market of the most important fundamentals. But in the short term the market is already in a fragile stage, most likely led to the policy side of the bad market, short-term adjustment. One-quarter of the financial data has just been published, showing the pressure on the central bank tightening regulation continue to increase. Investors are advised to the next control position, defensive risk.
Valuation of current market conditions
At present, the Shanghai index price-earnings ratio of about 34 times as that in Shenzhen is about 28 times, from the absolute value up, China's stock market is not cheap, not only far exceeded the mature capital markets, also exceeded the same for the emerging capital markets of India stock market, This phenomenon both from excess liquidity driven, more performance of listed companies increased impact.
Introduction to capital markets, excess liquidity has brought the funds to promote an exogenous variable, belonging to uncontrollable factors, and select the true performance of the growth of listed companies is real, and the long term, excellent performance of blue-chip companies, with high growth potential or the asset injection led to a significant improvement in the fundamentals of listed companies, is an effective option against market risk.
A high degree of industry boom in recent stage of industry
Analysts and industry with fixed assets investment growth rate are two indicators to determine the gross profit level of the industry boom. If the industry (telecommunications and petroleum industries except mature capital-intensive) are optimistic about the economy during the short term, new investment will continue into the industry, have therefore chosen to determine within a short-term fixed-asset investment in the industry boom degree of a leading indicator, from the recent five-month industry average growth rate of fixed investment, second quarter non-ferrous metals, rubber, beverage manufacturing, general equipment and electrical machinery industry, the highest economy.
Investment Strategy
Although the increase in the current market momentum yet to failure, but the risk control should be the primary objective for the next phase. Some fundamentals of good, with sustained growth in the ability of stocks, only because in 2006 one-off factors that could lead the release of the short-term absence of performance, its stock price performance stage to be suppressed and therefore, such shares may be to focus on. With the release of 2006 annual reports of such stocks has been largely out of doing bad, if the next few years can have substantial performance growth, it will be a good choice both offensive and defensive.
