Category: Money tips Release Date: 2005-12-24
In 2006 the stock market are turning up unilateral market, while in 2007 China's stock market is a long-term bull market in the early stages, you can still see more strategy, but a continuous rise may be less than in 2006, the market patterns may be complex. Investors should note that during the operation with the hot conversion market, concern for the growth of individual stocks. China's stock market in 2007 will show the following three main features which should cause investors concern.
Rapid changes in the stock market hot, stock prices soon reach a rational valuation of the ceiling
Institutional investors, securities market expansion is currently accelerating appreciation of the renminbi is expected to increase, stock index futures and other financial innovations forthcoming when, together with the future of unified tax system, universal banking and other institutional changes, allowing investors to quickly warm high, the market surplus of funds. In this case, almost all the potential of value stocks have been fully excavated, the share price will soon reach a rational valuation of the ceiling. For example the newly-listed China Life Insurance, Industrial and Commercial Bank of China and coal, railways and other popular stocks, in a very short period of time the price is made available quickly, leaving the investors is very limited room for maneuver.
Market hot spots in the pursuit of short-term investors, in this context operation more difficult. Having to quickly transform the battlefield, so investors need to pay a considerable effort to obtain the possibility of excess returns to gradually reduce. Market shares of banks such as the excavation is almost a week in place, while other types of plates are also rising very rapidly. Because institutional investors are more symmetric information, so beloved of the broad market for institutional investors, stock market, and gradually the performance of a regional semi-strong efficient market, for ordinary investors, the operation more difficult, it is difficult to get over blocks in such benefits.
Differences between the market valuation increase, a volatile stock market
As the stock has reached a rational valuation of the current limit Chinese stock markets around the relative no valuation has advantages in market mainly driven by rising investor expectations and market financing. According to the relevant empirical studies, the performance of the securities market conditions and relevance of the status of corporate earnings is only about 60%, while the other 40% with investors and the market supply of funds is expected to positively correlated. In estimating the performance of listed companies in 2006 rose 20% in 2007 up 25% of the performance, investors expect exceptionally optimistic, leading to higher stock prices continuously.
However, higher stock market investment institutions also increased the valuation of differences, especially under the new accounting standards for the valuation of enterprises, related to the following areas: For financial services companies, to raise loan-loss reserve recorded large differences occur , performance unpredictable fluctuations; while the real estate valuation terms the use of the public can have greater profits increase, but the corresponding advance tax should be paid the rate of return on assets is difficult to upgrade, so these companies use are more difficult to speculate on what kind of accounting system, Another value of the stock market's valuation of the differences increased, it is prone to sudden shocks. Investors should always adjust their portfolios in order to avoid market risk.
Market rally has changed the driving force
The first half of 2006 the market shares of the main driving force is to change to the price of stock index futures in the second half is mainly large cap stocks under the expected rapid increases in valuations. From the valuation point of view, although the overall trend in the market is still relatively optimistic, but the broader market's rapid rise in blue-chip stocks to short-term market on a bit overdrawn, the share price rise has led to broad market valuation of blue-chip stocks are declining relative attractiveness of . With the valuation of large-cap stocks the rapid increases in the Annual Report of the publication period and the advent of stock index futures and other financial innovations introduced into the sensitive period, the market started to increase the risks faced by the oscillation, but the stock market in the first quarter are less likely to enter the medium-term adjustment . The future market increases the driving force of growth, mainly in individual stocks to improve in the next 23 months, the growth of the Fund's trading profits is likely to become the major source of excess returns, longer-term look at the theme of investment is also will be a continuing source of excess returns, but the driving force will become a new industrial policies.
Overall, just from the market side factors, the large capitalization stocks rose while the relative yields can be sustained for some time, but the relative increase in yield rate will gradually slow down. In the investment strategy, investors should maintain a large proportion of the industry without changing the configuration, choose an adjustment of the proportion of the current industry-style configuration, the configuration of large-cap stocks moderately lower percentage of increase in the proportion of small-cap growth stock configuration, in particular, consumption service class in the small-cap growth stocks, particularly worthy of focus.
