2018-08-02

We Need A Rally: People's Daily Pumps A-Shares

iFeng: 人民日报:A股市场风险总体可控 长期发展前景值得期待
the People's Daily front page said that this year, due to the overlapping of multiple factors, A shares shock adjustment. According to reports, the CSRC attaches great importance to the risk prevention work of stock pledge forced liquidation, closely monitors market operation dynamics, strengthens risk mapping and stress testing, and has formulated a series of response plans. At present, the risk of stock pledge closing of listed companies is generally controllable. From the perspective of price-earnings ratio, the current A-share market is already at a low level. Since the beginning of this year, a number of listed companies in the A-shares have disclosed the announcement of major shareholder increase and share repurchase. The repurchase or increase in the company's shares by listed companies and their major shareholders usually indicates their firm confidence in the company's operation and development. At the same time, overseas institutional funds have also continued to flow into the A-share market this year.

Since the beginning of this year, China's capital market has adhered to the fundamental development direction of serving the real economy. The reform and opening up has continued to deepen, and comprehensive and strict supervision has persisted. The market operation has presented some new highlights and new features.
Market risk is generally controllable

Since the beginning of this year, due to the overlapping of multiple factors, the A-shares have been oscillating. Recently, the stock market pledge loan has increased the market value of the liquidation line, and the market is concerned.

The reporter's understanding from the regulatory authorities shows that the stock pledge loan is oriented to serve the real economy, and the fund merging parties are mostly the major shareholders of the listed company, and the funds are mainly used for business operation and development. In March of this year, the new rules for stock pledge were officially implemented, and the stock pledge business was regulated from the four aspects of financing threshold, capital use, pledge concentration and pledge rate, and related risks were prevented in advance. At present, the scale of stock pledges in the market has stabilized and declined. The average performance guarantee ratio of stock pledges in Shanghai and Shenzhen stock markets is relatively high, and the market value of stock pledges below the closed line is relatively small. From the actual situation, the default disposal has limited impact on the secondary market. For contracts that are under-guaranteed due to falling stock prices, the financial lender usually does not immediately request the liquidation, but negotiates with the merging party, through partial advance purchase, deferred purchase, supplementation of the underlying securities or other pledges. Process it. For individual companies that ultimately need to be disposed of, securities companies will not simply “single” through the secondary market, but will be more inclined to find the main body that is intended to undertake.

According to reports, the CSRC attaches great importance to the risk prevention work of stock pledge forced liquidation, closely monitors market operation dynamics, strengthens risk mapping and stress testing, and has formulated a series of response plans. At present, the risk of stock pledge closing of listed companies is generally controllable.

Long-term development prospects are expected

At present, China's economic situation is stable and the economic structure continues to be optimized, and new economic growth and traditional industrial upgrading have maintained a good momentum. The financial system has united and cooperated, the supervision system construction and financial risk disposal have achieved positive results, structural de-leverage has been promoted in an orderly manner, high-risk financial business has contracted, some institutions have savagely expanded their behavior, financial chaos has been initially curbed, and market constraints have gradually increased. The capital market is comprehensively and strictly regulated in accordance with the law, and the market is chaotically attacked, and the market ecology is re-engineered. The foundation for long-term stable operation of the market is more solid.

The performance of listed companies shows that under the role of supply-side structural reform and strengthening financial supervision, the momentum of high-quality development of the real economy is strengthening. From the perspective of price-earnings ratio, the current A-share market is already at a low level. On July 19, the Shanghai Stock Exchange Index has a P/E ratio of 13 times, which is lower than the valuation of major economies' stock markets. For example, the German DAX index is 14 times, the Japanese Nikkei 225 index is 17 times, and the US Dow Jones Industrial Average and the S&P 500 index are P/E ratios. It is about 25 times.

Since the beginning of this year, a number of listed companies in the A-shares have disclosed the announcement of major shareholder increase and share repurchase. According to preliminary statistics, 201 companies in Shanghai have disclosed plans for major shareholders and directors to increase their holdings. The cumulative commitments have exceeded 30 billion yuan, and the actual increase has been about 16.7 billion yuan. The repurchase or increase in the company's shares by listed companies and their major shareholders usually indicates their firm confidence in the company's operation and development. At the same time, overseas institutional funds have also continued to flow into the A-share market this year.

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