Category: Money tips Release Date: 2006-01-17
Source: China Securities News Author: Xu Hui
Monday the market again rose 1.27%, the two cities returned to pre-market stock transactions-intensive areas --- that is, the 1650-point benchmark Shanghai Composite Index and Shenzhen Composite Index of 420 regional point of the region. For the future to run the stock market, investors have great differences, the performance index in the market is running on a higher, but volume is not up to enlarge.
This year, the market in June, July and now into the 1650-point area three times, which are respectively on the 10th turnover of 205 billion yuan, 17.0 billion and 105 billion yuan. Stock index rose along with volume continued to shrink and that the market for 1650-point region, cautious, and also reflects the current situation of multiple games.
Appreciation and valuation of the Game
Appreciation would bring more funds, in turn will help promote the stock market higher; and relatively high stock valuations situation, and from a rational point of view, the market for over-made up alerts.
Recent central bank rate hike led to further accelerate the pace of yuan appreciation, the funds enter the Chinese market has soared. From the previous situation, the currency appreciation has brought money supply due to the sharp increase, which ultimately led to the stock valuation has increased significantly. Japan's experience has been the recent critics frequently mentioned.
But the problem is that the appreciation of the yuan rate will eventually go from here? Appreciation of the process will be long? Meanwhile, the appreciation and valuation function to enhance the relationship that exists between what? This is a decision to increase our market potential for an important variable.
But it should be noted that the current valuation level of Shanghai and Shenzhen is relatively high. According to the 2006 mid-year report data, assuming that a listed company on the whole, the second half of the profit line, if the Shanghai and Shenzhen A-share companies, as a company as a whole can be measured out the dynamics of the current A-share market price-earnings ratio is relatively high. From the appreciation of the perspective, the market going up; but from the valuation perspective, the market has soared.
Policy and Market Game
Speed up the direct financing, particularly in blue-chip companies listed on broad market process is a long-term management focus to achieve this purpose is a necessary condition for a better market environment; but on the other hand, IPO, especially large companies IPO operation of the market will tend to have certain negative effects --- at least the past that is the case. Under such conditions, some wary investors, in terms of policy and market games to look into the profitability of the operation for its own point.
The latest policy and market performance in the game on the ICBC listing. Summarized the views of a number of institutions more for the "Management's recent focus is to preserve its Industrial and Commercial Bank of China in October smooth the stock exchange; around the ICBC, institutions and management of the main game has been quietly started. No accident, in September should be the operation of hot money In mid-autumn. "This is a part of the institutions to the short-term bullish market operation in September reasons, although not comprehensive, but after all, a thinking approach.
Game performance and subject matter
This year, new energy, military, broker, the overall market, asset reorganization, Marina, the Olympic Games and other topics stocks come and go, some of those involved in the concept of share investment to achieve good earnings; At the same time, concerned about the long-term performance of listed companies to run the investment persons, perhaps only with the broader market gains equal to or better than tape. This is this year's A-share market value of investment in the basic status quo.
But I still insist that the value of investments in the securities market to obtain long-term, stable income the pack. First, the subject matter caused by changes in company performance, stock prices will eventually reverse regression. Second, the subject of strong stock market significantly improve the overall level of returns, making this year's market returns are high to Newcastle. In other words, this year, achieved a relatively high value to investors, despite the gains, but not significantly beyond the broader market, where there are special reasons. This does not constitute a waiver of such investment reasons.
In short, investors in fact do not need too much attention to the level of the overall market valuations, the market point of position, distribution changes in tempo and subject matter, but should focus on specific changes in the company to focus on investment and long-term investments to avoid market risks share of China's economic growth.
