Expert: Bull Market Is Returning To China. All Conditions Are Already Available.

Wang Yingying, a financial observer in China, said in his article that although Exchange Traded Fund (ETF) investors were worried that the rally would not last for a long time, Morgan Stanley said China could see a "super bull" rally and that the stock market would double in 18 months.

The Chinese government is promoting a new round of "four trillion", which is called "new four trillion".

Unlike the "old four trillion", which is dominated by government investment in 2008, and vigorously promote infrastructure construction, the "new four trillion" will give full play to the role of capital market.

The Huambo Institute of economic research has calculated that if the Shanghai composite index rises from 2000 to 4000, the market value of A shares will increase by 20 trillion yuan, resulting in new private enterprises' investment potential and residents' consumption potential of more than 4 trillion yuan.

This view deserves our attention.

Wu Jinglian, a famous economist, once thought that China's stock market is a market without rules.

Indeed, gambling is the best way to explain the past performance of China's stock market.

However, because of its unique "gambling atmosphere", it eventually created the crazy trend of China's stock market.

According to Bloomberg report, China's stock market will go up to a new level this week. The stock market value exceeds Japan, becoming the second largest stock market in the world.

The bull market is returning to China.

This November is indeed a memorable month for China's stock market.

The Shanghai Composite Index rose to a three year high on Tuesday, expanding to 14% in the past month, or at least 6 percentage points higher than the 92 other benchmark stock indexes in the world.

Mainland Chinese investors are currently the fastest growing securities investment accounts in three years, and the Shanghai stock market has risen to a record high, and the average return of new shares in 2014 has reached 180%.

China's central bank's steady growth efforts are reviving investor optimism.

Over the past five years, the Shanghai Composite Index has plummeted more than any other major benchmark stock index in the world.

Although Exchange Traded Fund (ETF) investors are worried that the rally will not last long, Morgan Stanley says China may see a "super bull" rally and the stock market will double in 18 months.

The Chinese government is promoting a new round of "four trillion", which is called "new four trillion".

Unlike the "old four trillion", which is dominated by government investment in 2008, and vigorously promote infrastructure construction, the "new four trillion" will give full play to the role of capital market.

The Huambo Institute of economic research has calculated that if the Shanghai composite index rises from 2000 to 4000, the market value of A shares will increase by 20 trillion yuan, resulting in new private enterprises' investment potential and residents' consumption potential of more than 4 trillion yuan.

It is worth mentioning that with the rapid growth of the index, the scale of margin trading in the market has also reached a new high.

Among them, according to the latest data, the current market margin margin has reached 820 billion yuan.

In the same period last year, the scale of margin trading in the two cities was also less than 340 billion yuan.

In addition, stock allocation has also become popular due to the rise of the stock market.

Among them, many P2P companies have been involved in funding activities and brought more than 10 times leverage to investors.

Goldman Sachs China held a media meeting on the 1 macroeconomic and A share strategy on 2015. It proposed that 400 billion of the funds will be pferred from the property market to the stock market next year.

Liu Jinjin, chief strategist at Goldman Sachs, said the data is relatively conservative.

According to Goldman Sachs estimates, the demand for real estate in 2014 was about 7 trillion yuan, and speculative property demand dropped by 9 percentage points, that is, 630 billion yuan of funds would flow out of the property market, and Goldman Sachs predicted that 60% of them would flow into the stock market, about 400 billion yuan.

Liu Jinjin, chief strategist at Goldman Sachs, believes that China's current assets allocation is about 60% of real estate assets and high in the global scope, while the allocation of equity assets such as stocks and funds is relatively low (around 5%). In the future, asset allocation of Chinese residents will gradually reduce asset allocation and increase asset allocation.

Jonathan Garner, Asia and emerging market strategist at Morgan Stanley in Hongkong, said that after the recent surge, China's stock market is still undervalued.

According to the data gathered by Peng Bo,

At present, the market rate of net assets is 1.7 times that of net assets, and the world index of MSCI is 17% lower than that of all countries.

The Shanghai Composite Index has an average premium of 24% over the past ten years.

Shi Cortesi Jian, a fund manager of Swiss &Global Asset Management Ltd. in Zurich, said low interest rates, falling gold prices and the decline of China's real estate market have increased the attractiveness of the stock market to mainland investors.

The parent company manages about $130 billion of assets.

Shi said, to China

In terms of asset allocation, where there is always money, there are already some conditions for the rise.

Bank of China

On Wednesday, the yield of spot bonds rose again, with 10 years of government bond yields rising more than 10bp (base point).

Traders said that the stock market's hot gold absorption effect was obvious, the funds diverted, the stock debt reappeared "the same pattern", the selling of spot bonds was heavier, and the sell-off mainly came from funds and some trading discs.

"The stock market is too good, the funds are diverted to the stock market, and the seven day repo rate is also very high, the yield on the spot is very fast, and the country has opened up (more than 10 BP) in 10 years."

A trader in a commercial bank in Shanghai said.

A broker dealer in Beijing also said, "where money goes to make money, credit (debt) is also a lot of selling, but no one buys it."

Tommy Ng, manager of distribution channel relations of South East Asset Management Limited, said there was a big room for growth in the stock market and investors should be very optimistic.

The company operates 5 billion 800 million US dollar FTSE China A50 ETF in Hongkong.