The Launch Of The Gem Index Indicates That The Market Is Near.

After 7 months of startup and operation, the gem index, which is concerned by the market, has finally been launched, which marks the smooth development of the gem and has entered a new period of development. After the launch of the index, the gem will undoubtedly become the focus of the market. Combined with the current operation of the main board market, we believe that the introduction of gem index or indicates that the growth enterprise market has entered the bottom area.

As we all know, index, as a reference index reflecting the overall price movements and movements of stocks, is inevitable after the market reaches a certain scale. At present, there are 86 listed companies on GEM, while the number of listed companies is only 50 when the SME board index is launched. In addition, the latest circulation market value of GEM has exceeded 80 billion yuan, and the total market value is more than 370 billion yuan. Therefore, it is reasonable to launch the gem index.

However, although the market launch of the gem index has long been expected, the number of launch time nodes is still somewhat unexpected. On the surface, the index launch time node is not too much attention, but the actual situation is, if the index launch time is not good, if the market is at a high level when the launch, causing the index to drop or fall behind the benchmark index for a long time, it is likely to affect investors' confidence in the market and affect the enthusiasm of investors. Therefore, management at the current time to launch the gem index is inevitable.

Since the launch of the gem, the overvalued value has been widely criticized. However, we have noticed that the valuation of the gem has dropped significantly after the recent drastic adjustment. According to the latest statistics of Wan de consulting, as of May 31st, the gem's static P / E in 2009 was about 72 times, but the dynamic P / E in 2010 dropped to about 52 times. At the same time, in the recent round of adjustment, the maximum adjustment of the main board and small and medium board is around 22%, while the maximum adjustment of the gem is over 30%. Under this background, does the introduction of the gem index reflect the management's recognition of the price level of the gem?

In fact, from the US Dow Jones index and Nasdaq index, the Dow Jones index's valuation is in the range of 14-20 times, while the Nasdaq market is 50 times PE over the long term. By comparison, the dynamic price earnings ratio of gem 50 times should be acceptable.

In addition, the launch of the gem index will undoubtedly help to attract incremental capital intervention, improve the investor structure of the gem, and contribute to the stable development of the growth enterprise market. We note that the SME board composite index (399101) was launched in June 8, 2005, when the index opened at 998 o'clock on the day, closing at 1095 points, reaching 99 points with an amplitude of 10%. The small and medium board index (399005), which was launched in January 24, 2006, closed at 1459 on the day. Although it saw a 1377 low point after more than a month, it was only 6% lower than the first day's closing point. Therefore, whether the gem index can launch the bottom area of the growth enterprise market is worth looking forward to.