Category: Money Tips Date: 2006-11-18
Source: Xu CSI Investment
Long and almost invisible in June before the substantial upside Quotes
Friday the market fell, so that the final line of the Shanghai Composite closed up Yinxian weeks. Since February the market we continue to emphasize the risk of March 2 we estimate the market in the pessimistic scenario, will likely be adjusted downwards to around 2,200 points level. The reality is that index of the last two months did not show a significant adjustment, however, went slightly upward. February benchmark Shanghai Composite Index rose 3.4% in March another benchmark Shanghai Composite Index has gained 1.7%. The original analysis there is no problem, because there is no doubt that the current market overvalued, and now should be concerned about is what kind of factors would be to promote the rational adjustment of the market is the launch of stock index futures? Is the disclosure of the annual report? Or the U.S. real estate crisis?
The author maintains that the current A-share market price-earnings ratio of about 36 times should be expected to return to about 20 times. Performance of listed companies, taking into account the dynamics of growth have led to performance improvement, we believe that the benchmark Shanghai Composite Index in the pessimistic scenario is likely to adjust to a 2200-point level; optimistic circumstances, the benchmark Shanghai Composite Index ended at 2,500 points, to adjust the year 2500 points to 3500 points in the inter - fluctuations, it is necessary to achieve from a wide range by chance, the best scenes. The market in June before the break up is difficult to see a substantial Quotes.
Four City show up as no co-ordination
Although the tape did not show the last two months to adjust, but the index rose in comparison, the market is more worthy of worrying phenomenon:
First, the U.S. stock market periodic adjustments sign. The latest news is even more worrying. The U.S. sub-prime mortgage business because the customer default on loans bankrupt or closed down one after another, from early last year, now has more than 20 sub-prime mortgage business closure, or not find a buyer, but the most recent attention is being hovered the edge of bankruptcy in the United States the second-largest subprime mortgage provider New Century Financial. Report published this week, three-level home loans once again make the U.S. stock market plunge as investors worried about the subprime problem extends to major financial industry and stimulate the U.S. economy deteriorate further.
Second, H-share market to adjust periodically to confirm entry. Since January 4, 2007 Start, H-share market of adjustment to the recent biggest adjustment has been achieved 21.5%. This shows that the H-share market has entered a stage adjustments. March 5 JP Morgan Chase mass of about 600 million yuan cash in H-shares, which it has its biggest since mid-2004 short handwriting. Showed that some institutions the recent H-share market bearish earnings.
Third, B shares closed lower for the first half of March, while the Spring Festival in Shanghai and Shenzhen B-share index since the cumulative decline has reached 9.5%. In most cases, B shares A shares is often the leading indicator, then the adjustment of the B shares to adjust whether it is phased, or minor fluctuations? Will the adjustment of B shares A shares will be a sign of adjustment, or imaginary?
Fourth, the overall A-share upside in the process of blue chips and subject matter-cap stocks have a significant differentiation. Blue chips have emerged since the New Year, a significant adjustment in the leading stocks Merchants Bank, Vanke's biggest adjustment, respectively 21.15% and 24.6%. On the contrary, in recent months, the relatively large number of assets into the stock theme of doubling of the stock market there.
To be "crazy years" or to "golden years" of
Performance increases catch up with valuations rise, the market is currently facing a major challenge. Followed is that investors must make a choice: whether to "crazy years" or to "golden years"?
Guoxin Securities by the end of February according to statistics, currently on the market shares of more than 5 into more than 50 times earnings. The situation from a single stock price-earnings ratio (based on the results of the previous four quarters), it seems, the situation can not be optimistic. According to the National Letter of statistics, as of the end of February, 1140 in the non-loss companies, price-earnings ratio of more than 100 times the stock up to 260, accounting for 22.8%; price-earnings ratio of 50 to 100 times the stock up to 286, price-earnings ratio of 30 times to 50 times the number of shares up to between 318 and 30 times the 268 stocks. As can be seen, five into the stock price-earnings ratio is higher than about 50 times, and intuitive in terms of the number of shares to invest is drastically reduced.
If investors expect the market will remain at current levels, the sharp rise in price-earnings ratio of more than 100 times the stock rose from 260 to 600, so that is clearly against the background of A-share market will enter a frenzied era. Therefore, the current investors face a choice is whether to "crazy years" or to "golden years"?
Is worth noting that, recently, an authoritative source, will be A, H arbitrage research, which related to equity investments will be formed for a lot of pressure.
