Li Xunlei: There Is A Big Bubble In A Shares.

Li Xunlei, vice president of Haitong Securities, held at the 2014 China Economic Forum sponsored by the Shanghai development research foundation, the Institute for the development of excellence and the Department of Economic Research of the Shanghai Academy of Social Sciences, pointed out: Despite the recent economic downturn, the price of China's capital market is largely overestimated and there is a big bubble, and this situation will continue.

Looking ahead to the future capital market, the securities industry is adding leverage to the stock market. It is worthwhile for the securities companies to continue to look good, environmental protection, energy conservation, consumption and health.

The two themes of China's economic reform and promotion will bring opportunities to the capital market.

With the decline of China's economy, many points of view are that the capital market is rather depressed.

Li Xunlei believes that this argument is just the opposite of reality. Most of the stock prices in China's capital market have not been underestimated, and they have been overvalued for a long time.

Nevertheless, China's stock market is still highly sought after by investors.

Li Xunlei believes that the A share market can basically reflect the current macroeconomic situation in China, including the expectations for the future.

The performance of real estate stocks and bank shares is not good. The fundamental reason is that the market generally expects that China's real estate and banking industry will not be able to sustain high profits in the future. The optimism of the industry growth, the pioneering and small version of the Internet finance, is very good. Taking the venture edition as an example, its P / E ratio is about 70 times. In the US, the market share of the Nasdaq market is only about 21 times, overestimated by more than two times.

"Why is the valuation level so high in China? Because we are a retail LED market and an irrational market.

The gem has been going on for two years and is continuing. The motherboard is dominated by cyclical plates, which basically keeps pace with China's economic growth.

The main board reflects China's real situation; our growth enterprise board represents growth, and its growth is often a kind of expectation.

For example, now there is a network called orient fortune. As we all know, it is mainly a website for securities. Its market value is two times that of sina. Although profit is not as good as Sina, it can also rise, because investors are very optimistic.

Do you say it has no bubble? "

The recent surge in the stock market, the rise of brokerage stocks and real estate stocks once again reflects investors' confidence in the market, and also reflects the trend of increasing leverage on the whole of the policy.

Li Xunlei said: "the Chinese economy itself adds a bubble on the basis of this bubble, and it is not willing to leverage. So our policy is still increasing leverage in general. Of course, the willingness of management is to turn lever, but the leveraged lever has not been turned into. The overall debt ratio of enterprises has not declined. In the first three quarters, I am afraid it is still rising. The total liabilities of enterprises account for nearly 130% of GDP."

Speaking of the future trend of China's stock market, Li Xunlei said that the bubble will continue to increase because the market has already had many favorable aspects.

If the Central Bank continues to cut interest rates again and drop further, if next year's steady growth target is consistent with this year, the stock market should go up again.

Shanghai and Hong Kong get cold: dislocation under asymmetric information

The opening of Shanghai and Hong Kong in November 17th should be an important channel for China's capital market to open to the outside world.

But to a certain extent, it was quite unexpected, but Li Xunlei thought the crux of the problem lies in the information asymmetry in China's capital market. We do not know enough about the management's behavior towards investors and the behavior of investors in regulators.

"In fact, the Chinese stock market itself is a retail market -- the retail market has no money.

To make Shanghai and Hong Kong pass requires 500 thousand of the capital to enter, but how many 500 thousand customers are there in the A share market? I'm afraid the proportion is less than 5%. If there are 500 thousand or more millions of words, 15 years ago, it will enter the Hongkong market.

Our underground finance is very developed. In fact, 15 years ago, the safe checked the illegal inflow of foreign exchange in Hongkong. Many brokers in mainland China had branches in Hongkong. Before the reunification of Hongkong 97, our private hot money had already entered Hongkong.

In this way, the freshness of Shanghai and Hong Kong must be discounted.

In conclusion, information asymmetry is the main reason that leads to overestimation and underestimation in our decision-making process.

It has something in common with the recent stock registration system which is very loud. Both are the embodiment of opening capital and relaxing capital.

In fact, the stock registration system is not a new thing born of Hong Kong and Shanghai pass. In the third Plenary Session of the 18th CPC Central Committee, the paper clearly pointed out: "China must develop multi-level capital market, and stock issuance should be registered."

In contrast, China's A share board market is known as the most stringent listing Market: it requires a listed company to have a profit of three years, and its scale of earnings and scale of financing.

There are many restrictions, which have killed many excellent domestic companies.

Therefore, many very promising companies have chosen to list overseas, such as Tencent, Baidu, Jingdong, Alibaba, and Sina, Sohu, Ctrip and so on.

Their businesses are all domestic, but dividends are overseas, and market capitalization is rising overseas.

To some extent, this contradiction reflects the multiple objectives of economic policy, but sometimes the single objective is more efficient than multiple objectives.

Why has our stock issuing system been changed for so many years or criticized by everyone? Because there are many objectives of the policy. On the one hand, we need to increase the liquidity of the capital market, thus implementing the registration system. On the one hand, we must suspend the issue of new shares for the purpose of stabilizing the market.

Many of our regulatory policies are very specific to individual accounts and individuals.

In this regard, I hope the regulators can understand that you can not maintain stability in the market, but also push the registration system and make our stock market go up. This is a contradiction in itself.

Our stock market is basically a bubble market. Why do we not have a bubble? Do we need to control the rhythm of IPO? I think the emergence of these problems shows that we manage too much and sometimes turn good intentions into bad ones.

Speculation is highly correlated with market maturity, and capital is always profit driven.

Counter cyclical policy: reform must break the interest pattern

The public is optimistic about the stock market, but economists may have different views on the economy.

Li Xunlei believes that there is still a gap between the economy and the stock market. The market must have an objective and rational understanding and should not be overly optimistic that the capital market is linear upward.

In fact, in view of the economy, the securities firms are in a contradiction.

On the whole, economists are really over interpreting the information about interest rate cuts, which may not be so complicated.

But because the amount of information we can get is too small, we desperately choose every word, every word, and guess what the upper level is.

Our counter cyclical policies do come out quite a lot, which means our government still hopes that the economy will be over 7%.

However, the reform we are looking forward to is still relatively small, which is somewhat different from our expectations.

Why are there fewer initiatives in China's reform? First of all, our A share investors are opposed indirectly. Retail investors are opposed to expansion from the first day of listing.

Many times, it is very important to protect the interests of investors, but reform can not always consider the interests of both sides, and there will never be a thorough reform.

Such a reform is always the end of the game, and the reform must touch the interest and how to coordinate the interests.

As for the counter cyclical policy, reform can be done in the pro cyclical or reverse cycle, and the key lies in the interests.

Whether the Chinese economy is good or bad can break the interest chain again. If so, this reform is very promising.

Li Xunlei believes that the future can still be seen on the platform such as Shanghai and Hong Kong, which is actually very valuable, and its significance is to give the market an access to internationalization, although the traffic of that channel is still very small.

Nevertheless, the Chinese market is still a retail market, compared with nearly 30% of Korea's overseas investment, and it is also a retail market.

If we want to become a market dominated by institutional investors, we will have a very long process.

But we are at the beginning of internationalization.

China's biggest investment opportunities still come from reform drive, economic pformation and consumption upgrading.

A prosperous capital market will bring more convenient financing channels to enterprises, which is also beneficial to the development of the market.

"Overseas experience has something to learn from, for example, the bull market in Germany and the bull market in the UK, and their booming development is related to privatization.

We are talking about the reform of state-owned enterprises, but in essence, I think the biggest problem or the way out is privatization.

A wave of privatization can improve our profitability, improve the efficiency of our enterprises, and improve our corporate governance, which may be beneficial to our internal market.

The impact of the reform of state-owned enterprises on our A share market next year is unclear, and I wonder if there will be any substantial progress in this regard.

However, capital flows to the capital market are real.

I am in the securities industry, the securities industry plus leverage is very obvious.

Generally speaking, we have changed from indirect financing to direct financing. After many years of crying out, the pace has begun to grow faster and faster. Therefore, securities companies are still worth watching.

I think this is one of the opportunities for pformation. "