Category: Money tips Release Date: 2006-06-16
Source: Shenyin Author: Gui Haoming
Shanghai stock market this week, 1.93%
Open 1540.22 Close 1574.47
1.91% in Shenzhen this week,
Open 3962.93 Close 4058.30
If we say that in May the stock market surged far beyond the people expected, then the stock market since early June fell, but also far greater than previously thought. In just a few weeks, the broader market appeared about 10% drop in turnover during the day from a peak of more than 80 billion yuan suddenly shrink to less than 30 billion yuan. Clearly, the market of super-strength from the past the obvious weakness later, before and after the formation of a very big contrast. As many investors have analyzed, the reason why the stock market would be out of such a sharp shocks of the stock market, for many reasons, but also a way, is inevitable. Now the boom has become a memory, while the sharp fall of the stock market has passed, the market in general has shown a pattern of Su Liang finishing. As a result, people naturally pay attention to this question: there will be the next wave of rising stock market do? If so, then when would arise, and how much effort it?
July intersection of multiple factors
The real end of the stock market in July to adjust, expand upward potential is relatively large. The reason why not think so, mainly because in July will be an intersection of multiple factors resulting point in time, it is relatively easy to find the reasons broader market higher.
As we all know, when the stock rose to close to 1700 points, many investors find the investment in the stock valuation has been no great advantage. Obviously, this is and the performance of listed companies rising stock prices down, especially in the first quarter of this year, increasing the drop rate. In the performance can no longer continue to support the market rally against the backdrop of the broader market to rely on liquidity to form the upward momentum. Of course, this increases the stability there is a problem, so once the liquidity constrained, volume reduction, naturally, led directly to the stock market decline. Obviously, at this time could be held on the stock market rally, depends largely on the effectiveness of listed companies, the trend of stagnation or even decline can be changed.
From now on this year's major research institutions in the performance of listed companies, medium-term forecast of view, more common view is that the effectiveness will be up again. This fact should be said that is easier to prove, such as the effectiveness of listed companies this year, a quarter of the decline was mainly due to iron and steel, petrochemical industry, inefficiency and, after deducting the overall effectiveness of this factor is basically balanced. The most recent period, with the steel and oil prices increase, the effectiveness of these two key sectors will obviously rebound and driving the overall efficiency of recovery. Clearly, in July with the listed companies reported a formal disclosure, people will see the benefit of listed companies to switch a good clear signal, which will undoubtedly enhance the confidence of the people's ownership, and supporting the stock market to re-constitute an important reason for the rising. In addition, the Shanghai and Shenzhen stock prices, but also in and around the sharp pullback in the market, while the peripheral market down again and people's speculation about the Federal Reserve might again raise interest rates. Originally the market generally agreed that the Federal Reserve raising interest rates to 5% after the end of this tightening cycle, but some of the information disclosed in the past period as well as Federal Reserve officials, talk, and many people feel that the original estimates may be dashed. From the expected rate hike will not raise interest rates to the sure, with so much understanding of changes in stock exchange and commodity futures market is bound to decline. By the end of June, the Fed will make the decision whether to raise interest rates, while raising interest rates even if the one hand, has been ahead of the beginning of this bad digestion, on the other hand, taking into account the high interest rates for the U.S. economy, affordability is also the fear that raising interest rates sub-tightening cycle in the last one or two of. As a result, the market for the United States is expected to tighten monetary policy is bound to change, thus the capital market will bring the potential benefits, and this will not only help the United States and other overseas stock markets rise, but also to improve the operation of stock markets in Shanghai and Shenzhen the environment, the formation of the better atmosphere.
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In fact, recently there have been strong in overseas markets rebound, the reason lies in the basic cash crunch bad. Even though it really the case remains to be seen, there is reason to believe that in July will be to eliminate these uncertainties, the market environment will be further improved.
Of course, in July the factors that constitute the intersection of these is not just half a year to China's economy is performing the data management market innovation in support of the launch of the initiative, etc., are likely to disclose at this time, or be implemented. Thus, from the weak stock market in July, once again started the factors behind the rally is still quite adequate.
Expand the necessary conditions for Quotes
Of course, to launch a vigorous and rising market, merely because of the emergence of these factors, and the formation of the intersection is not enough. From the market itself, at least with the need for such a number of conditions:
The first is the relationship between supply and demand balance. Now, only the secondary market from the stock market has developed into a secondary market, co-operation, which resulted in the coordination of the two markets, in other words that is, the stock balance of supply and demand for funds. Objectively speaking, the recent sharp stock market decline, there is a very significant reason is that the people of the issuance of new shares-intensive concerns. Clearly, the stock market to be in the current position to a floor, you need to have more specific expectations expansion. If a large stock continuous distribution, then it is likely to form in the short term imbalance between supply and demand, the market will fall sharply due to bear. Therefore, there is no balance between supply and demand situation in the formation, in July and do not signify a big rally.
Secondly, the hot new trends in mining should be. Quotes on a big run, must have led the subject matter as a hot, pre-non-ferrous metals such as plates on the role. Should be said that the existing market has been hot for full excavation, the short-term in this aspect is difficult to have a drastic move. However, in the context of financial innovation, the overall market, mergers and acquisitions and other capital operation, the space is very large, listed companies progress in this area may well evolve into market operations in New York. Of course, this should become the consensus of the hot spots, but also the need for a nurturing process and its success can also become a big market, a key condition for Quotes. Also, from the beginning in June, shares of stock will begin a gradual reform ban the circulation, although the amount is not large, but that is a signal, it will test the capacity of market participants will test the companies major shareholders held stability. At that time, turn allotment had been caused by the relevant stock market volatility, and the number listed on the broader market reaches a certain size Shihai constitutes not a small pressure. While it is not the same as with the case, but the cash is real pressure there is, if the pressure is too large and the market is unable to bear, then the market will rally to start there is much difficulty.
We should say that the above-mentioned may only affect the market strength in July a number of conditions, is not comprehensive. Perhaps a certain angle, they may not have any binding effect, but in the broader market operations, their role and influence that warrants consideration. If these conditions are meet, then the trend of the stock market in July may be very well.
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