Category: Money tips Release Date: 2007-06-10
Source: Xu CSI Investment
Three arrows shot at the central bank is still not able to clutch the mad rush of the Lower Ngau Tau: This week benchmark Shanghai Composite Index continued to rise 3.71%, bringing total gains this year benchmark Shanghai Composite Index has reached 56.23 percent, while the 2006 year and a half since the benchmark Shanghai Composite Index has gained a cumulative 260%. Many investors now think the problem is that the future market is still worth investing? If there is adjustment, then what can we play a role in curbing the power. This not only relates to the vested interests of investor protection, also involves the regulators for the stock market bubble to prevent too large.
From international experience, China's stock market bubble is still in the affordable range are structural foam, its distance to form a bubble there is a larger space. I estimated that in 2007, 2008 and 2009 respectively, the Shanghai Composite control in 6000 points, 8000 points and 10000 points less than you can think that the market does not form a bubble. This can be seen as the current bull market to bear the intensity. Judging from the current situation, the stock market bubble still has the potential to continue to expand, but the market and administrative control measures that investors should pay attention to two key indicators.
Result, the bubble expansion factors still exist
From the factors that promote the formation of the bull market bubble to see, A-share market bubbles are still expanding power. RMB appreciation, the current market price-earnings ratio and funding aspects of the show to see the long-term bull market is still sustainable.
The exchange rate appreciation of the yen from 350 yen in 1971, began to appreciate one U.S. dollars, to break up in 1995, around 100 yen to one U.S. dollars, the appreciation of 2.5 times. Nikkei index from 1971 started to rise at about 3000 to 1989 and rose to around 38,000 points; Japan, the average price of land at 10 o'clock on the 1971 index rose 110 points to 1989. The stock market and real estate price index rose a multiple of 11 times were around. Our side, the long-term appreciation of RMB is still in its infancy. Given 5 to 10 years time, we may see a 1 dollar RMB4, appreciation of space when the two times higher than that in this context, the stock market rises will be how much? Progressive and long-term appreciation for the stock market will form a strong support. If the A shares that investors do not be too quick buck, the bull market should be able to continue for many years.
PE connection, A unit is currently 40 times the static and dynamic 30-fold, from Japan, Taiwan, the U.S. bull market when the bubble burst 70 times, 80 times and 60 times earnings, there are big gaps. Moreover, the blue-chip stocks in a bull market peak, its price-earnings ratio is higher than the market average, such as the United States in 1999 when the blue chips in the 100 times earnings. This means that from the current structural foam, to the full bubble appears, the market is still a long distance. I estimate that if 2007, 2008 and 2009 benchmark Shanghai Composite Index points are controlled at 6,000 points, 8,000 points and 10,000 points less than you can think that the market does not form a bubble.
Capital, a huge savings on the stock market does not match the market value of the serious, resulting in capital into the stock market will continue in the future. Taiwan's stock market peaked in 1989 when the stock market capitalization is 3.5 times household savings in 1999, is located at the top of the U.S. stock market, the stock market is 5 times the savings deposits of residents. At present, the Shanghai and Shenzhen in the 18 trillion total market capitalization is about more than just the total amount of domestic household savings, which means that there are considerable financial strength to push market higher.
Beware of the emergence and administrative control of inflation
On the other hand, from the Japanese experience and the experience of China's Taiwan to the central bank to keep raising interest rates as the representative of the market-oriented regulation and control, and in order to collect profits tax as the representative of the administrative regulation and control method is the end of the bull market bubble, "tesujis."
Inflation caused by the central bank continued to raise interest rates led to the bursting of the bubble in Japan 80 years of direct factors. Japan's CPI index bottomed out in 1987, after a rebound, to the CPI index in 1989, a quarter of more than 2%, the Bank of Japan started to raise interest rates. Official interest rates from 1989 to about 2.2% to rise to 6% in mid-1990, in a little more than a year time, the Bank of Japan interest rate increase total number has risen to 5 times. From the end of 1989, the Nikkei index more than two years from the 38000-point time fell to about 15,000 or thereabouts. Over the same period the market price-earnings ratio fell from 70 times to 30 times.
The Chief of adjustment measures is the result of China's Taiwan 80 years a major factor in the bursting of the bubble. Late 80's, Taiwan's bull market in the five-year period have gone through 20 years of Japan's stock market has walked the streets. From 1986 to 1990, Taiwan's stock market rose 12-fold, from 1,000 points up to 12,000 points, price-earnings ratio of 10 times from 1986 up to 80 times that of 1990. Taiwan's stock market rose due to a dramatic decline in the discount rate in Taiwan, from 1982, nearly 12% to 5% or less in 1986. The stock rose as the official performance has fueled the stock market bubble; and then forced to impose capital gains tax means to pierce the bubble, so that averages less than six months time, fell by 12,000 points, 3,000 points below.
Judging from the current domestic situation in the short term management of the stock market does not form a consensus on administrative control, which means that short-term management of the possibility of administrative control is not high; and whether there will be a sustained, rapid increases in interest rates, then the depends on whether inflation under control. Inflation often means a continuous, rapid increases in interest rates is why inflation data in the stock market to some extent affect the running of the very important factor. General analysis that the April data showed inflation rising factors in mitigation, the lower food prices for months, does not rule out the possibility of rising inflation, but significantly less likely to increase. Which to some extent, eliminate the market for central bank raising interest rates frequently concerns. However, if something is wished, the inflation rate continued to rise, the central bank raising interest rates because of the initial rate of delayed and continuous, rapid increases in interest rates, which will make the accelerating expansion of the stock market bubble crash.
