Category: Money tips Release Date: 2006-04-01
Now investors know that the bull market came, but the bull market development, context is not clear.
The background of a bull market
First of all to know that the bull market in the background. The current domestic situation is that fewer and fewer opportunities for industrial investment, but the accumulation of industrial investment funds is increasing. Because when industry growth slows down, part of industrial capital into surplus capital, from the production and trade out, engaging in short-term financial investment activities, while at the same time, new industrial investment of money motivation inhibited by government policies, combined with innovation and prosperity of financial instruments increase the money supply in the financial market. During this period, there will be more and more money into the securities market.
Bear market is a gradual process of risk-averse, more and more shares are abandoned, from the 2:8 will become 1:9 phenomenon of the last phenomenon. Bear market, only the highest quality stocks have a chance. However, a bull market is a gradual increase in risk-bearing capacity of the process, investors took turns looking for the concept and story, will be wave after wave of high index of push until the end of the story, or running out of money. But a close look together, we can grasp the story about the order, that is, the bull market over the years.
The growth of endogenous growth story of
Money chasing the story, first of all the enterprises of the true story of endogenous growth. Such enterprises are the real growth stocks, such as large commercial stake in Suning Appliance and so on. But the corporate fundamentals endogenous growth rate is always not keep up with rapidly rising stock speed. Therefore, the growth of endogenous growth story begun to fade, investors began to describe or to imagine a company's future growth potential, whether growth is real or in the concept. After all, in a bull market as long as the confidence and capital, investors will be pushed to the high price of the stock. Soon in a bull market, the concept of endogenous growth will be rapid increase in stock valuations, investors first performance in accordance with the 2006 valuation, and later began to look at valuation in 2007, and then consider the 2008 or even later that the 2010 estimates the value is reasonable, and bear market value of the shares were abandoned have been re-discovered something. The result is that many rely on endogenous growth, lofty stock price, the stock market is at this stage, this stage is the intermediate stage of a bull market. At this time, many companies rely on analysis of endogenous growth investment opportunities for investors generally hard to find undervalued stocks, and endogenous growth, the concept of good stocks, or stocks are not cheap.
Exogenous growth, value creation
Therefore, funding needs to find a new story. In fact, due to the real economy and the virtual economy, differentiation, large shareholders will be in the real economy through the virtual economy industry, asset securitization, can bring great opportunities. This is the majority shareholder benefit because they can increase profits and market value of the assets. It is also advantageous to investors, after all, with the injection of assets, earnings release, the stock price rise inevitable. Split share structure reform, the bull market is expected, A strong valuation of shares, as well as the functional recovery of investment and financing, have promoted the process of asset securitization entities. This process is not endogenous, but to rely on exogenous growth, major shareholders of listed companies by giving high quality assets into the real economy has brought a sharp rise in stock price, which is of value creation story.
This story is not a new story, in 1996, red chips listed in Hong Kong have also experienced this process, with continuous injection of quality assets, stock prices rise quickly and dramatically. Assets into the story mainly focused on strong corporate shareholder, such shareholder generally would not cut back their own shares. Since the current shareholding structure is mainly state-owned shares are mostly state-owned shares holds the largest resources, asset injection or the value creation story would be possible.
The bull market is not the end of the story is not finished
At present, our market is value driven from the endogenous to the value creation driven transition period. Many have the concept of value creation and value into the beginning of the performance of the stock. For example, China's satellite-like defense stocks, how do you see it is high above the valuation, but if you take into account possible asset injection, and perhaps their valuation is not high. The next few months, asset injection will become the fashion, the market will enter a value creation of the "big investment bank era," turns a listed company's value creation can bring the assets of listed companies to enhance the long-term profitability and share price increases.
Currently the story is not finished, the bull market will not end, more of a small adjustment, which is the buying opportunity. (Send
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