Category: Money tips Release Date: 2007-05-08
Since the Bank of China listed on the Shanghai and Shenzhen cities has continued at a high level shock finishing tape, long-short sides Bosha intense, from the two cities under the KLCI has broken on the 10th moving average trend shows that at present stage of the short side has clearly occupied a dominant position, short-term decline trends in shape, although the inherent surrounding the stock market down as well, as well as market shares increased expansion rate hike expectations and other factors, but also an undeniable fact that the split share structure reform, along with the gradual completion of share reform as a commitment to limit the flow of non-negotiable Shares will be phased lifting of restrictions on the circulation, accounting for two-thirds of the total market value of corporate shares only a huge "aircraft carrier" can finally out to sea, and this test of the securities market is undoubtedly huge, the market can bear is currently on the market the parties involved, especially institutional investors, who think deeply reflect on the main issues.
If two years ago, non-tradable shares traded was regarded as a scourge, a lot of people even think that is likely to lead to market collapse. Today, the shares changed scenario brought about by more than a year are encouraging, and its first stage of reform of the price of stocks into the ending part of the stage, followed by that of non-tradable shares onto the market in the next few years, the circulation phase, which is Inspection Unit, the outcome of the consolidation and reform an important step. How does this stage interpretation?
We have adopted a more comprehensive system of dialectical analysis of various factors, saying that "caged tiger" came out to bring the market impact is multi-faceted, both the negative side, a more favorable side, we are too afraid of is neither necessary, nor do not have to blindly optimistic, how can one say?
First look at the limited sale of stock reform the rules, that is, 12 months after the share reform, holding 5% equity limit selling shareholders are free to sell, hold more than 5% reduction to no more than 5%; 24 months later. Holds more than 5% of the total reduction may be limited to selling no more than 10% of the total share capital, limited sale of shares after full thaw (major shareholders of listed companies except for the additional commitments).
Look at the size and the process of reduction. Lifting of the ban this year's stock market value of approximately 720 billion yuan (7.949 billion shares Gushu Wei), in which the greatest pressure to lift the ban in August, reaching 34 billion market capitalization (3.236 billion shares), 10 compared with 2.601 billion shares in November to 2.112 billion shares. Lifting of the ban in 2007 the market value of 203.3 billion; in 2008 rose to 320.8 billion; in 2009 to reach 532.8 billion; 2010 rapid decline thereafter.
On the surface, such a large reduction will be overwhelmed by the size of the two A-share market, let alone by the continued rise in the market over the past year, some level of stock valuations are no longer attractive, especially those fundamentals are poor, there is no controlling competition, the high valuation of the stock will face tremendous pressure to sell, its decline will level than expected, thereby reducing the level of the market average, the cities A shares KLCI pressure.
But from another level, the limited sale of shares in circulation may not be listed as one imagines the impact of A-share market. This is because the major shareholders unless there are exceptional circumstances and are unwilling or not their in the market to sell the stock, which, while controlling the need to maintain, but also the constraints of practical interest, since a certain proportion of shares sold according to law to disclose as soon as its cast out of a small amount of the stock could lead to a drastic shrinkage of the market value of the loss but the biggest shareholder is none other than themselves, the recent performance of Sany Heavy Industry illustrated this point. In addition, holding a high proportion of listed company shares changed hands for the prevention and control of its considerable amounts of funds will be invested to prepare anti-takeover purposes, played a certain extent, offset by strength. It can be expected in the future in Shanghai and Shenzhen A-share market behavior will become more active in mergers and acquisitions.
We should see is that the split share structure reform, large shareholders and the interests of minority shareholders would be in line-oriented, large shareholders are more concerned with enhancement of corporate value and stock performance, corporate governance structure are fully improved, a listed company has thus been a more solid foundation for development, making it in the market dynamics and increasing the value realization of the valuation.
Again from a longer-term perspective, compared to the current more than 10 trillion of bank deposits, as well as the rapid growth of trillions of dollars of social security funds, insurance funds, corporate annuities and other long-term funds, even if all the flow of the market value of only 3 trillion is still a little more than a few, not to mention the rate of securitization of Chinese nationals has been in the international low level, coupled with the appreciation of foreign capital inflows brought about by effects of the stock market capital supply are certainly not lightly, which is supported by the Chinese A Shares into the bull market development period of the most solid foundation.
Therefore, the limited sale of shares in circulation than the one listed on the actual impact on the psychological expected to much smaller, "aircraft carrier" to the sea was not terrible, terrible investors fails to identify trends and to cling to wrong investment philosophy, the result will always be away from the wealth.
