Category: Money tips Release Date: 2006-11-03
Source: Morgan Stanley Investment Authors: XU Zhi
Introduction of a market, just like telling a story. The theme of this story is that inflation is on how to correctly, at about 1300 points, 1000 points is how reasonable, at 1300 points, 1,800 points, described how the should be, in the 1800 point about why a record high. Of course, in this process, tell the story of the people are sober, listening to stories of people sometimes hesitant and sometimes inspired but do not understand. Finally the end of the story is that even the storyteller himself believed his own story has become a people who listen to the story. End of the bull market is usually the case. About to wrap up in 2006, when the story is not over, but to a conflict in the chapter back to the plot.
Wrap up by the end of the main short-term shocks
In 2006 left the last trading week, the regional index has been running high. I had predicted after the index hit a new high short-term trend, that there should be a pulled out of the process of shocks for the afternoon to leave a certain space. The Shanghai Composite Index, after breaking 2245 points, connecting upstream, close to the 2,400-point area, are faced with a shock choice.
On the one hand, the early promotion of large capitalization stock indexes ways that are not consecutive in the next period of time a long-term replication, on the other hand, in 2007 the focus of structural adjustment positions not in the majority of the existing core assets, stocks, but in order to meet the a period of time under the listing of large-cap stocks to a climax. Break a new high, the market in 2006, the task had been completed and the remainder of the stock market do not need to go far, and more just need to consider how to consolidate this result.
Market Resources is currently too much focus on the financial and real estate section, this type of stock is indeed the core of a capital market. However, the current disk in the main varieties of view, the valuation has been fully exploited, and have lost the beginning of the year have the advantage of relative positioning. Like the Industrial and Commercial Bank of China, Bank of China that the most important indicator of market shares, with our previous understanding of large-cap blue chips have been different, its location, or even far beyond the market average, short-term loss of blue-chip concept, leaving only the market's effect.
The past six months of unilateral rally in the kinds of circumstances and to promote access to shocks should be expected. However, before closing in 2006, this adjustment will not be too much shock, it will not appear Po Wei's head. Perhaps the reason is very simple, it was an institutional core assets Quotes dominated market, or indeed any aspects of view, is to hang-controlled Quotes of the agencies need to surrender in 2006, a very good report. Therefore, in December 2006, at least to maintain a stable market position, who do not want to undermine the year-end summary of a good mood.
Changes in the market early next year
I think that 2006 will be the final trading hours of high volatility means closing, opening in 2007 will undertake such a shock. Many people predicted in 2007, after opening the market trend, which is a high point after the re-start. Opened in 2007, the most important content was not among the trend in the market, but the discussion of the market.
This in turn back to a story told by a Quotes theme - how to prove that the current point position correct? Then, on this basis up deconstruction index. The current A-share market, the average price-earnings ratio of 25 times, so the face of the core mandate of the stock market has become how to make people believe it is 25 times price-earnings ratio is a reasonable position? And then look for a reasonable increase is expected to push up index.
This orientation is not correct I do not know, but one thing is clear to me that in 2007 of the stock market could not rely on as the 2006 reform, as factors and the valuation of stock speculation-driven. To bull market can continue, there are three aspects of the expected indispensable, first, the continued macroeconomic growth is expected, and second, the expected appreciation of the yuan and the third is the overall profitability of listed companies to maintain growth expectations. The first two expectations of the market, but the impact may be relatively long-term, but the third is expected in front of its opening in 2007 the trend is very important.
Because in the bull market in hype, there such a law: Assuming the current stock position is reasonable, and then look for a higher price speculation reasons. Therefore, the 2007 annual report is very important, especially in the second half to lead the market value of the stock index was up big, only the annual growth can stabilize Quotes. I would like to maintain a level of profitability in 2006 Annual growth trend is expected, and thus from the dynamic point of view to reduce the current price-earnings ratio, the stability of the market to find new support.
2007 Annual Report Quotes may be for volatility shocks associated with hidden adjustment, the relevant bit set does not have the advantage of body-core assets will be abandoned in batches. Quotes For the year, there is a more important factor, and that is what the new batch of blue chip companies will be positioned in the A-share market start.
