Category: Money tips Release Date: 2007-02-07
In 2006, China's securities market in the "Eleventh Five-Year" plan and exchange rate adjustments under the new engines will gradually out of the shadow of the bear market lasted for five years. In the tradable, globalization highlights the parity value assessment system, investment philosophy, the index fluctuation range is greater than the market rate in 2005, but not large, will show a trend of consolidation rebound, the Shanghai Composite Index's core operating space in the 1000-1350 point, local hidden bull market.
Functional recovery of financing change of investment preferences
2006 will usher in A-share market of the new from the old, as well as IPO and refinancing behavior re-open their floodgates. This will bring about two aspects of stock market tips:
First, in the tradable market open, IPO and refinancing projects, because of parity pricing advantage, with high investment attractiveness of incremental funding to attract off-accession, will also stimulate the market in 2006, one of the main factors active with a more positive positive. But under the new "Securities Law" and "Company Law" guiding ideology, reducing the direct financing requirements, in 2006 a significant impact on market expansion, an increase of direct financing through the issuance and listing of the size of the current market in terms of both there is negative impact.
Second, the full circulation in the IPO market, and re-financing activities will change the pricing mechanism, we believe that in 2006 IPO and refinancing will be more market-oriented pricing mechanism, pricing levels will be significantly reduced, in raising the level of stock market investment market and the G attractive at the same time, will also not completed shareholding reform of the stock price down. Stock price in 2006 is expected to reproduce the pattern of structural adjustment冰火两重?
In short, we believe that the functional recovery of the financing will change the market segments and investment preferences to the market to bring in fresh blood at the same time, it will lead to market "grass is always greener" investment psychology. At the same time, based on full circulation of parity pricing mechanism to bring advantages to the stock of the stock market pressure on the formation of diversion of funds.
Trading rules to change the rules of the game is expected to affect the
The new "Securities Law" to the transaction system to provide space for expansion. In 2005, based on the trading of financial derivatives market, we expect that in 2006 the Securities and Exchange system will be a breakthrough to restore T +0 trading system and the expansion of credit transaction space, will give the stock market in 2006 to bring opportunities and challenges.
Trading Rules changes will ease the market capitalization of surface tension, increase market activity, but also inevitably brings to the market a strong speculative climate. Therefore, how to balance and coordinate the relationship between investment and speculation, the stock market and investment returns and risk control at a reasonable and manageable within the framework of this system is a prerequisite for the adjustment. Was established in late 2005 warrants the creation of a continuous system of this gives a good start, we believe that, in 2006, will continue to introduce relevant policies, such as "market maker" and the reform of the system of rules for trading convoy.
Changes in trading rules is expected to lay the biggest stock market in 2006 paved the way for upgrading the service functions of securities market intermediaries to expand living space, while brokers also will change the market rules of the game. We believe that the downturn of the past five years on the Chinese securities market, the impact of this policy is more advantages than disadvantages, mainly reflected in stimulating an active market to curb price fluctuations and marketing thickness.
China into a strategic investment in part of the global capital
China's securities market into the WTO, the financial opening up, China's securities market will have two effects:
First, the scale of 2006, foreign institutional investors will rapidly expand the power of foreign institutional investors will also be markedly enhanced, and its investment philosophy and values assessment, the strengths of influence and the right to speak than before the QFII will be more directly and obvious. We believe that in 2006 a certain sense, China's securities market can be defined as "open years", QFII investment philosophy to guide vane of the role of the market will be more explicit.
Second, China's securities market will be the foreign institutional investors as part of a global investment strategy is its global capital investment in a piece. This is more than a decade China's stock market closed environment for the formation of a clear distinction, in the exchange rate and return on investment driven by factors such as the global investment capital flows may cause significant fluctuations in the securities market, the proposition in 2006, will be we need to focus on one of the elements of concern.
China's securities market in 2006 will be a truly global vision of the watershed toward the face of globalization and liberalization of the market value of the assets, return on investment relative price advantage will be the basis of the most important investment, exchange rates, economic development trends and industry comparative advantage, etc. factor is to determine the main parameters of international capital flows, China's investment in local securities markets will become the world's investment opportunities.
Valuation at a reasonable level
In recent years, the continued low level of market valuation, November 30, 2005 data show that, A-share market-weighted average price of 4.41 yuan; weighted average price-earnings ratio of 19.37 times; weighted average of 1.74 times book value, all hit new lows . A-share market value of the investment has become more apparent (Figure 1).
Since 2002, A-shares historical data show, A-share market price distribution year left, and the cap, lower population expanding group of high-priced stocks are shrinking. As of November 30, 2005, A-share market price of 2-6 yuan equity weighting to 72%, creating the historical record (Figure 2).
Since 2002, the A-share historical data show that price-earnings ratio, A-share market price-earnings ratio has left the distribution of signs, but left the more obvious focus on low price-earnings ratio of 20 times the region, which shares a widening group of nearly 30% of the data to show a reasonable stock valuations ever. In the 100 times higher than the high price-earnings ratio regions are shrinking, while in the price-earnings ratio negative region, namely, the proportion of loss-making stock groups, no significant change in the performance of A-share market turnaround situation is not optimistic about the loss-making enterprises (Figure 3).
Since 2002, the A-share book value of historical data show, A-share market book value distribution of the same tendency was left in the book value of less than one (stock market value below par value) Shares of regional groups, significant increase in the proportion of value reach 15%; and the range of 1-2 times the book value of equity ratio rose to 49.48%; and in more than 10 times the book value of regional shares fell sharply the proportion of all hit a new record. Data indicate that, A shares of listed companies increased to reflect the real value of investment risk, decreased significantly (Figure 4).
2005 A-share market down to the level of the overall valuation of 20 times price-earnings ratio below the average level close to the international market is, especially in the May-tradable share reform of the outstanding shares of shareholders an average of 30% of the outstanding compensation, makes the A-share market price-earnings ratio lower than Tokyo, New York and other markets, with Germany, London, Taiwan and Singapore, the level of the market price-earnings ratio rather, only South Korea than in Hong Kong H shares and the market is slightly higher. G-share market in late 2005, only 10 times earnings, but also with the Hong Kong H-share market valuation of the level of integration. With the continuous progress of reform and equity score, A-share market valuation of the level of the whole there will be nearly 10% -15% decline. From this, we believe that in the Context of Globalization, A-share market valuation level is already at a reasonable level, G-share market valuation is starting to show superiority.
Full year 2005, the Shanghai Composite Index and the Hong Kong Hang Seng Index, red-chip index, H-share index of the dividend rate statistics show that the Shanghai Composite Index rose steadily after-tax dividend yield and dividend yield with the red-chip index close to, but still lower than the The Hang Seng Index and H-share index dividend yield levels. From the beginning in May, the Shanghai Composite Index after-tax dividend yield of more than 2%, higher than the one-year bank deposit rates. Published during the year with "to improve the quality of listed companies, the views of" policy, we expect the actual dividend payout in 2005 better than 2004 levels, the A-share market rate of return on investment will be increased. Thus we believe that rational investors, A-share market attractive to investors starting to show.
Comprehensive evaluation, we believe that, from the perspective of the overall A-share market, A-share market valuation level of the average investment in the international market area, and in 2006 with the split share structure reforms, valuation will be further down the level of investment value is reasonable, but the market slowdown in overall corporate profitability is expected to make the valuation upward momentum inadequate.
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