B-share market in 2006 Investment Strategy Report Money Tips

Category: Money Tips Date: 2007-07-02

Ups and downs after year. 2005 is the B-share market and opening up domestic capital the most lonely person in a year: market, the Shanghai and Shenzhen B shares have hit a new low in recent years, trading has also continued to slump; policy, the share-trading reform kicked off, although After including this writer, many market participants have repeatedly called for, but B still exclude outside shareholders. With further open to foreign investment in the securities market, as well as the reform of RMB exchange rate mechanism, B-share market seem to have lost its way and become a tasteless but wasteful to discard the chicken ribs, more and more people are beginning to realize the complete disappearance of B-share market The days are not far off.

1, Shanghai and Shenzhen B refers to high to low

If the one-year perspective, in 2005 in Shanghai and Shenzhen B shares basic rendering the adjustment from high to low trend. The Shanghai B refers to the beginning of opening of 75.56 points, up to March 10 of 84.22 points, a minimum of July 21 of 50.32 points to close at the end of 62.02 points, closing in 2004 fell 18.02% over the same period the Shanghai Integrated mean decrease of 8.32%, which is B shares of Shanghai stock market since the founding of the first time in 4 consecutive years, Yinxian closing situation. Shenzhen B refers to the same period to close at 195.38 points, compared with 11.11% under the end of 2004, slightly stronger than the same period in the Shenzhen Composite Index performance. From the turnover, the market is still very low turnover, Shanghai stock market from 2004's 5.685 billion shares slightly increased to 5.923 billion shares in 2005; and Shenzhen from the previous year's 9.776 billion shares fell to 9.111 billion shares.

Table 1: Shanghai and Shenzhen B shares and the decline in the Shanghai and Shenzhen Composite Index rose in control

04-12-3104 Up decline in the maximum 05 minimum 05 Up 05-12-3005 Shanghai B means the decline -27.90% 75.65% 84.22 50.32 62.02 -18.02 Shanghai Composite 1266.49 -15.40% -8.32% 1328.53 998.22 1161.06 Shenzhen B refers 219.80 -19.20% 277.67 184.53 195.38 -11.11% Shenzhen Composite Index 315.81 -16.59% 334.14 235.64 278.54 -11.80%

Source: Hai Tong Securities Research Institute

Shenzhen B shares on the Shanghai stock market a good reason for there to continue the performance of B shares is mainly because the value investing philosophy has gradually become the mainstream investment strategy, fundamentals Shenzhen B-share companies was significantly stronger in the Shanghai stock market and therefore I plates in the core assets to benefit Quotes maximum. In addition, the appreciation of the RMB exchange rate factors in promoting the Hong Kong stock market in particular, the Hang Seng China Enterprises Index (the H shares index) rose steadily, while the Shenzhen B shares together with the stimulus.

Continue to be the mainstream in the value investing philosophy, when, the author notes that the past performance of a number of blue chip stocks as the apparent decline in the expected adjustment. 2004 macro-control policies continue to have an impact in 2005, industrial enterprises operating performance significantly dropped, and the renminbi appreciation for some of the pressure on export-oriented enterprises is very obvious, steel, cement, glass, machinery, textiles, electronic components, etc. decline in the general performance of listed companies. Automobile industry in 2004 presented the first two quarter of growth "brake" signs in 2005 are still no significant improvement in main Changan Automobile B, Jiangling B-to continue to stand low. In addition, a number of electronic components stock price decline has also been the impact, such as the large side B, BOE B and power B shares fell more than 30% throughout the year. Iron and steel, textiles, machinery industry, the company is limited by the impact of macroeconomic regulation and control, there have also come down significantly. In addition, some utilities stocks also fell, although in 2005 still a huge shortfall of domestic electricity, the power companies in Shanghai and Shenzhen are due to coal, natural gas, soaring prices and the price can not rise in step with the Internet, making the profitability of power companies by extrusion, Yuedian Li B, Shennan Electric B, East Huadian Power B shares and B shares that the performance of several of the previous steady decline in the power unit generally larger than last year's index.

However, the underlying rise for the good companies still do not Fiji, such as coal, real estate, tourism, food industry, the economy of companies a high degree of popular favor, corresponding to companies within the industry, such as Yitai B shares, Wanke B, New City B shares, China Merchants B, Jin Jiang B shares, Changyu B-expression was significantly stronger than the index.

In addition, the Shanghai and Shenzhen with international competitive edge of enterprises Zhenhua B shares and B last year in a completely different set of movements, in which the former gains the right to re-gain nearly 60%, ranking the forefront of Shanghai and Shenzhen B-share index, while the latter is expected to decline by a profit affect the present ascribed to down trend, the right to re-price declines and was unchanged.

Relatively speaking, the Shanghai and Shenzhen ST plate is still dire straits, the overall running lost tape did not say most of the stock price has been lower than face value. However, there are some fundamentals of ST companies began to change, such as * ST UMC B efficiency throughout the year by tapping the potential profitability, is expected to return to normal trading, stock price performance is stronger than the index.

Second, the policy orientation is still unclear

Since 2005, there was indeed a series of policy factors more or less on the Shanghai and Shenzhen B-share market has a direct or indirect, including the QDII system arrangement in front of the RMB exchange rate mechanism reform, QFII mechanism for the further implementation of the other. Overall, however, instead of that from the government departments in charge of various policies on the 2005 B-share market have an impact, it is better that the majority of investors expect a series of policy-oriented in fact play a more direct role.

One thing is still worth a write, this is the beginning of May 2005 split share structure reform. Split share structure reform is based on "state-owned shares, legal person shares and other non-circulating shares in circulation in order to obtain the right to the payment of the price of the outstanding shares of the shareholders," the basis for gate opening, but this may not be able to find a theoretical basis for the management of the practice be further interpreted as "Stock A-share market reform is a matter between the shareholders of different nature, A non-tradable shareholders of shares in the A share market in order to obtain the flow of power to the shareholders of A shares in circulation to pay a certain price right, B shares and H shares shareholders not to participate in reform" .

August 5 China Securities Regulatory Commission and other ministries jointly promulgated the "on the split share structure reform of listed companies guidance" (hereinafter referred to as "Opinions"), September 4 CSRC formally issued "split share structure reform of listed companies, management practices" (hereinafter referred to as "Rules") as a way to share reform work has made the final policy guidance and regulatory constraints.

"Opinion" Article 2 explicitly states that "split share structure" is defined, that is, "A-share market listed company's shares by the Stock Exchange has been able to distinguish between non-tradable shares and tradable shares," split share structure has been limited to in the A-share market, that is, and B shares, H shares has little to do. Article 11 also states that "split share structure reform is to solve A-share market related to the balance between the interests of the shareholders, for the same time, there is H shares or B shares A-share listed companies, from the A-share market related to tradable shareholders, the issue resolved through consultation , "which is almost completely deprived the shareholders of B shares in the split share structure reform, the possibility of obtaining price. The same time, Article 8 also clearly stated that "... ... A-share market related to solicit the views of the circulation of shareholders, through consultation in line with the actual situation of the company's share-trading reform plan, taking into account general meeting of shareholders of the process from the A-share market-related shareholder meeting to vote on classification "- further B shares, H shares of the shareholders general meeting of shareholders to express their views through the channels blocked.

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