Category: Money Tips Date: 2005-12-19
Source: Tianxin Investment Authors: Yong You-Jie
Precisely because such a rapid rise in the broader market, some investors had fear of heights, that the Shanghai Composite is close to a record high point of place, because, according to a recent rally, if so, in 2006, the last one month break 2245 point of all-time high. The high point of the year 2245 brought down the shadow of five-year bear market is still here, therefore, fear of heights is also reasonable.
Blind fear of high is not necessary, because the index points, although they are still 2000, but the valuation is not the same, such as the year 2000 points, the market, the average price-earnings ratio of 55 times, while the current A-share market, the average price-earnings ratio is only 26 times, Shanghai and Shenzhen 300 average price-earnings ratio is only 22 times. Similarly, in the Shanghai Composite Index from 2003 to 2004 the "Five Golden Flowers" performance era, the Shanghai Composite at 1300 points to 1783 points, volatility, when the average price-earnings ratio of 30 times, but after two years of the evolution of the Shanghai Composite has jumped over 2000 points, the current average price-earnings ratio is only 26 times.
So the data show that the current A-share market index, which reached a high, but because of the past three years of rapid growth and performance of listed companies joined the company's underestimation of the value of the new features such as rapidly making the Shanghai Composite forming a virtuous circle, namely, performance increases, the index rose, but it does not sync up the valuation characteristics. Because of this, industry believes that the A-share market is expected to completely get rid of cattle a year over the past five years, bears used to ring, because in the past A-share market index is often accompanied by rising inflation, price-earnings ratio followed up the characteristics of sync, but now is the index rose , price-earnings ratio does not sync to keep up with new features.
Market, so new features are formed, the main two things, first, the natural growth performance of listed companies, and second, arising from the passive growth in IPO, IPO not only because it brings new high-quality assets, including Industrial and Commercial Bank of China, North Star Industrial Bank of China, Poly Real Estate, etc., so as to enhance the company's internal valuation of benefits. But also because the first day of new shares included in index, making the Shanghai Composite index has unrealistically high feature, which is higher than the current 2000 points to 2000 points, five years ago, there is a substantive difference.
Because of this, the Shanghai Composite high point of 2245 was quickly increase the probability of a breakthrough, after all, the expansion of the current A-share market is still healthy pace of advance, and that the quality of listed companies rapidly increase, especially stocks turn over after major shareholders inject more than one wave behavior of a wave, which are conducive to enhancing the intrinsic value of listed companies to reduce the level of the secondary market, the average valuation. So, off the pace of capital approach is still fast, that is, new money and there is no psychological fear of high, but constant influx of A-share market, and so is expected to push up on the indexes, new features of the face of such market, no wonder Insiders say do not rule out the Shanghai Composite continued to blow in the short term, in the foreseeable time to tear up all-time high point of 2245.
Growth stocks are expected to become a new impetus to a Quote. A-share market led the emergence of new hot spot is likely a driving force, that is, growth stocks, according to broker a strategic analysis report showed that the recent A-share market to promote large up strength lies in large capitalization stocks and value stocks, while growth shares lagged far behind the broader market. A growing number of industry insiders believe the stock has been a resurgence of growth momentum. Moreover, new funds have moved into the current Jiancang stage, therefore, we recommend investors to pay close attention to trends in growth stocks, as well as brought about investment opportunities.
