Gem Index Is Listed Today

After running smoothly for more than 7 months, the gem officially entered the exponential era.

In June 1st, gem price index and income index were officially listed, together with Shenzhen Shenzhen index and small and medium board index together constitute the core index reflecting the operation of Listed Companies in Shenzhen Stock Exchange.

According to the insiders, the launch of the gem index and subsequent index linked products such as ETF will enable investors to invest more effectively in the growth enterprise market and share the future of China's economic development represented by strategic emerging industries.

　　推出時機已成熟

Statistics show that as of May 31st, the number of companies issued by the gem was 88, with 86 listed companies, with a total market value of 370 billion 824 million yuan, accounting for 6.3% of the total market capitalization of Shenzhen A shares, and a circulation market value of 83 billion 469 million yuan, accounting for 2.47% of the market value of Shenzhen A shares.

Shanghai securities analyst Qian Weihai said that in terms of quantity, the gem index has already had enough sample basis, and the market itself has become an objective condition for the index to launch.

On the other hand, Qian Weihai analysis, at this point in the launch of the gem index, behind the meaning may be that management for the entire gem valuation recognition.

"The gem has been in a relatively low position after the fall in the broader market. At this point, the launch index has reduced the possibility of breaking the base point to a certain extent," Qian Weihai told reporters.

Looking at the overall price earnings ratio of gem, with the 2009 annual report financial data and the closing price in May 31, 2010, the average price earnings ratio of the GEM market is 75 times, which has been substantially reduced by 100 times the price earnings ratio at the beginning of the year.

Zhang Hongbin, a researcher at Datong securities business board, said that considering the high growth of GEM companies, its dynamic P / E ratio has basically dropped to a relatively reasonable level.

From the experience of small and medium-sized boards, the first 120 trading days of the first 8 listed companies rose to 31% on average for the Shenzhen composite index, with a deviation of 35% in the first two months and no obvious deviation after two months.

This indicates that the SME board market will take two months from start-up to smooth operation.

The IPO of GEM listed companies is relatively fast, with 28 companies listed on the first list. In January 20, 2010, the number of listed companies exceeded 50, and the time needed to stabilize the market should not exceed that of small and medium-sized boards.

Therefore, on the current situation, the gem has entered a smooth running period.

Insiders said that concerns about a sharp drop in the gem index could be lifted.

　　或推升聯動效應

For the launch of the index, the Shenzhen Stock Exchange said that it will highlight the operating characteristics of the gem as a relatively independent market level, and enhance its influence and service capabilities.

In response, a number of securities insiders interviewed by reporters said that the index will push up the linkage effect of individual stocks.

Zhang Hongbin said that although in the medium to long term, the trend of differentiation of GEM stocks will be difficult to change, but in the short term, after the index is launched, the linkage efficiency will be enhanced.

Specifically, the activity of GEM stocks will be enhanced, while the index will reflect the relative independent market operation, and it will also help to increase and fall.

Qian Weihai said that the introduction of the index will also enhance the correlation between the gem index and the whole market.

According to the relevant statistics, from the simulation trend of the gem index, we see that in the 134 trading days, there are 68 trading days, the gem index wins the Shenzhen composite index; 38 trading days have the opposite trend with the Shenzhen composite index, that is, the direction of the gem index fluctuation is opposite to that of Shenzhen composite index; the rise and fall of the gem index and the Shenzhen Composite Index's rise and fall are 2 percentage points or more than 55 trading days, accounting for more than 40%.

Qian Weihai believes that the gem index may be difficult to avoid significant volatility, which is also determined by the high risk and high return on the gem stock.

　　長期趨勢看好

With the introduction of the index, related products linked to index will also be developed, such as gem ETF and related stock index futures.

Zhang Hongbin said that investing in ETF will enable investors to better share the growth of GEM companies and to better avoid risks, especially delisting risks.

Qian Weihai believes that ETF will be much more attractive to investors, especially institutional investors, from this point of view. In the medium and long term, gem will attract more funds, especially institutional capital, so that the index will increase in the medium and long term.