Ye Tan: The Stock Market Has Risen Three Times.

On the first trading day of December, the Shanghai Composite Index hit 2720.74 points at 2680.16 points, encouraged by monetary policy.

In November, the Shanghai Composite Index rose 10.85%, more than 7.01% of the German DAX index and 2.45% of the US Standard & Poor's 500.

Interestingly, Australia's S & P 200 fell 3.86% in the same resource dominated economy, while Russia's RTS fell 10.74%.

The same is the real economy down, why the A share market and upstream resource countries stock market go against the trend?

The A share market is driven by strong liquidity.

Following the rate cut, the introduction of social security funds into the market and the introduction of deposit insurance system are the strong support for private capital to flow to capital market, especially to the stock market.

There are three ways: first, to boost the stock market and make capital serve the company; second, to boost equity investment and M & A pactions, so that private funds will gradually replace banks, and water will be injected into the real economy; third, the illusion of wealth will cause the consumer to be happy to consume, and consolidate the proportion of consumption in 2013 that accounts for GDP is higher than that of fixed assets.

According to the statistics of private placement of Qing Ke group, China's M & a market has completed 501 pactions in the third quarter of 2014, an increase of 43.1% over the same period last year, and a 17.9% increase in the ring market. The total amount of merger and acquisition cases was 481, involving 36 billion 300 million US dollars in pactions, a 98.8% increase over the same period last year, an increase of 30.5% over the same period, and the paction activity and scale both set the highest quarterly value of China's M & a market.

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The number of cases is up to 136, and the 136 pactions are not included in the statistics of the 501 pactions that have been completed. The M & a market in China announced that 448 mergers and acquisitions were still in progress, including 386 cases involving 386 US dollars.

No wonder, in the near future, VC,

A steady stream of private sensitive funds has entered the investment market to gain a high premium after the listing or merger.

The government is pleased to see that the social cost of economic pformation is depressed to the minimum by the use of private capital mergers and acquisitions.

In the three quarter of this year, the highest number of mergers and acquisitions was mechanical manufacturing, and 54 cases ranked first in the past two years, followed by clean technology and biotechnology / health care industry. Two cases of mergers and acquisitions were 52, accounting for second of the 10.4%, and third of them were energy and mineral industries.

From the point of view of the amount of mergers and acquisitions, the energy and mineral industry ranks first in the quarter. During the period, 38 cases involving 10 billion 113 million dollars were disclosed, accounting for 27.9% of the total paction volume; the second place was the Internet industry, which completed 4 billion 27 million US dollars in pactions, accounting for 11.1% and third in the financial sector.

Machinery manufacturing, energy and other fields of excess are funded by private capital, completing mergers and acquisitions, minimizing social costs: no bank bad loans, but equity trading and risk interest pfer.

At the same time, the Internet and other innovative industries, there are also sources of public resources to provide continuous nourishment, do not have to stir up the masses by bank loans, government subsidies, why not?

Overall, policy has loosened.

In July, the SFC drafted the decision on the management of major assets reorganization of listed companies (Draft for Soliciting Comments) and the decision on Revising the administrative measures for acquisition of listed companies (Draft for Soliciting Comments), and promoted the paction of mergers and acquisitions from the aspects of capital and management.

On the other hand, the government is constantly encouraging the wealth effect to encourage more capital to invest in the two tier stock market.

Maintaining the popularity of the stock market will also have a wealth effect in the whole society.

People forget the pain of entities, forget the pain of Industrial Enterprises above Designated Size, and the biggest interest is to focus on which sector the big funds go to.

The stock market has risen sharply, and investors have two attitudes: or, cash in small amounts, expand consumption under the anaesthetic of wealth effect, buy high-end products that they dare not buy at any time, and drink too much wine that they dare not drink at ordinary times, or save every penny as an additional investment, and continue to invest in the stock market that is passionate.

The former can increase consumption and the latter can expand investment.

Either way, they are more popular than having money in banks or hiding in their homes.

Considering that the current policy is mainly conducive to large companies such as finance, the flow of funds is clearer.

In the next few years, from mergers and acquisitions to underestimation, funds will return to entrepreneurial small companies.

As China's economic pformation is still continuing and the risks are uncertain, the driving force for maintaining the enthusiasm of the stock market will last for a long time, and the market has the final say on how long it will last.