Inside And Outside The Besieged A Shares Besieged &Nbsp; Expect To Save The Market Or Extravagant Demands.

The international rating agency Standard Pool Co again launched a "killer" on the 19 day, and suddenly announced the downgrading of Italy's sovereign debt.

This exacerbated Europe's debt crisis and added uncertainty to the economic outlook of Europe and the United States.

At the same time, the domestic fundamentals and capital surface did not change at all. In August, the profit margin of state-owned enterprises declined, and the profitability of listed companies was doubtful. China's hydropower giant IPO and inflation were all factors that A shares could not get around.

Because the European Union's informal meeting last weekend did not have any new ideas, it was only an assessment of the agreement reached, which disappointed the market.

Meanwhile, officials including the German finance minister warned at the weekend meeting that if Greece could not meet the requirements, it would not be able to get the next aid loan, which would make the country face the risk of default.

Skei Pinder Le G, Deputy Prime Minister and Minister of foreign affairs of Austria, also said on the 18 th that the current European debt crisis is very serious, and he does not even rule out the possibility of Greece's bankruptcy.

As a result, the European market was once again in a panic after a quiet weekend.

European stocks opened sharply lower on Monday, while France's CAC40 fell 2.61%, UK FTSE100 fell 1.95% and Germany's DAX30 fell 2.82%.

Among them, bank shares continue

The European debt crisis has shown signs of divergence, and the economic slowdown has not yet been fully accepted.

Although there are rumours that Italy is asking China to buy Italy treasury bonds and the five major central banks announced that they will jointly provide three US dollar liquidity operations, if they are carefully analyzed, the above good practices are pitional good measures and can not fundamentally solve the European debt crisis.

Last week, European finance minister and US Treasury Secretary Geithner met in Poland, saying that a year and a half of debt crisis had left them no spare room for tax relief. Analysts pointed out that this would increase consumption to stimulate economic growth, but economic growth in the second half of 2011 would be very weak.

Last week, the A share market performance was relatively stable, but there were more obvious fluctuations in the stock market, mainly affected by the sharp fluctuations of the international stock market.

At present, although the European debt problem will still perplex the future performance of A shares, the decline of A shares is not entirely affected by the international market. Recently, the frequent inflection of housing prices and usurious lending by the media has been a threat to domestic financial security, and the real economy is struggling, making it difficult to change the long-term weakness of A shares.

Under the influence of various negative factors such as rising raw materials, rising labor costs and RMB appreciation, China's small and medium-sized enterprises are facing a new round of shocks.

Because the profit margins of small and medium-sized enterprises have been squeezed repeatedly, many enterprises are facing serious survival difficulties.

Famous scholar Ba Shu song believes that in the current period of tight money, the credit scale is limited, so that the pressure of SMEs is far greater than that of large enterprises.

At present, many enterprises have been hovering on the edge of bankruptcy and bankruptcy, and the influence has been pmitted from some provinces in the south to the northern region.

As the pillar force of China's real economy, the decline of state-owned enterprises' profits is even more worrying.

The Ministry of Finance recently published data that, in the past two months, state-owned enterprises have achieved a continuous decline in profits and taxes and fees.

Among them, profits fell fourth times in a row.

Insiders said that state owned enterprises had monopoly status and scale advantage, but their profit growth continued to decline.

Much of this is due to the continued tightening of monetary policy this year, which has led to an increase in financial costs.

The expectation is that the bailout is extravagant.

Under the background of "four faces" at home and abroad, the market began to hope that the government would introduce positive measures to pull A shares out of the mire.

However, from the perspective of the current IPO speed, management is more concerned about the financing role of A shares. Therefore, it is very unlikely that the management will stop issuing new shares to "save the market".

At present, the A share market is mainly maintained by the stock fund, and the capital side is in a tight balance. It will bring considerable pressure to the market capital and at least the psychological level.

This week, a total of 6 new shares of A shares can be purchased online. The total size of the proposed shares is up to 4 billion 596 million yuan, up 422% from last week, the highest in 6 weeks.

Coupled with the emergence of such super IPO as China's hydropower and shaanshan coal shares, the A share market, which is currently in a state of panic, is worse than ever.

At present, the European debt crisis is still in the fermentation process, the domestic problems have not been improved, plus the good policy has never been out. Under such background, the Shanghai and Shenzhen A shares can only maintain the weak position.

The central bank's survey showed that the willingness of depositors to invest in stocks fell to its lowest level since 2009.

The central bank's third quarter survey also showed that only 9.2% of people wanted to invest in stocks, which fell to the lowest level since 2009.

In fact, whenever A shares appear in the history of IPO, the market trend is always disappointing.

China Petroleum (9.60, -0.17, -1.74%), which plans to raise 37 billion 700 million yuan in early November 2007, has just become the top of the Shanghai Stock Exchange Index in 2007. In addition, the Chinese construction (3.39, -0.10, -2.87%) with fund-raising of 40 billion 500 million yuan at the end of July 2009 has also happened to be a landmark event of the Shanghai stock index's 2009 rally.

Galaxy Securities believes that in the context of short term domestic factors and uncertainties in the external market, it is difficult to fundamentally reverse the weakness of the A share market. The issuance of large cap shares such as China's hydropower will exacerbate the market tension in the two tier market. If there are no other factors to hedge, it is expected that the market will continue to move downward because of the pressure of capital market.