Guo Shiliang: What Is The Shortage Of Money In The Market?

Where is the market short of money?

Is there any shortage of money in China's stock market? In fact, the performance of the market has already given the answer.

In December 9, 2014, the Shanghai and Shenzhen two cities were able to exceed 1 trillion and 200 billion of the total turnover in the whole day, achieving the largest level of energy in the history of A shares. In the period before and after, the overall volume of Shanghai and Shenzhen markets still hovered above the level of one trillion yuan per day.

However, after two months, the single day volume of Shanghai and Shenzhen two cities rapidly shrank to below 500 billion yuan. By the end of February 10th this year, the volume of Shanghai and Shenzhen stock markets could be slightly higher than 400 billion yuan, which has shrunk by more than half of the previous 1 trillion and 200 billion peak.

This shows that the A share market is not short of money, and the core factor determining the market liquidity is whether the market has sufficient investment attraction.

This Tuesday is the key time for the intensive issuance of new shares. According to statistics, 24 new issues will be issued between February 9th and 12, of which 17 will be occupied on Tuesday. Combined with the size of the current issue of new shares, the accumulated frozen funds will be as high as 2 trillion and 300 billion.

Hit the issue of new shares intensive issuance, the market also began to appear obvious lack of money signals.

According to statistics, on the same day, a number of reverse repo rates rose sharply. Among them, the Shanghai Stock Exchange's one day treasury bond repurchase rate rose 6042.5% to 53.440% annual yield. The Shenzhen Stock Exchange's one day treasury bond repurchase rate also soared 9899.33%, reaching 29.998% of the annualized yield.

According to past rules, the corresponding repo rate will rise to varying degrees at the end of each month, at the end of the quarter or at the end of the year. Even if the cycle is shortened to a shorter time point, the repo rate will rise more or less before and after Thursday in a week.

However, in view of the sharp rise in the repo rate, the core reason can only be attributed to the intensive issuance of new shares.

It is undeniable that looking back at the previous rounds of IPO, there is a sharp rise in repo rate.

In June 18, 2014, a new round of IPO was officially launched. A total of 9 new shares were issued during the period, with a total freeze of 922 billion 200 million yuan. Affected by this, the corresponding repo rate during the period of the stock exchange rose sharply. Among them, the Shanghai Stock Exchange's one day repo rate hit 30% of the annualized yield level.

At the end of July 2014, the second round of IPO started, during which 11 new shares were issued, with a total freeze of 818 billion 700 million yuan. During this period, the repo rate of the exchange also rose sharply, and the repurchase rate of one day rose to more than 15% of the annualized rate of return.

A month later, another batch of new shares were issued densely. During the period, a total of nearly 900 billion yuan was frozen. At the same time, it was also accompanied by a sharp rise in repo rate.

Obviously, the current market has formed a normal state, that is, whenever the issue of new shares is intensive, the repo rate will also rise sharply, especially in the absence of money.

As mentioned above, the A share market has never lacked funds and lacks confidence in investment. So why is there a shortage of money in many rounds of new issue intensive offerings?

In fact, behind the intensive issue of new shares, the investment attraction of the market has long been weakened. At the same time, the effect of making money on new shares is quite obvious. A large number of stock funds are fighting to fight new. There is no doubt that this is a typical performance of the market in pursuit of profit maximization, and it is also a great sadness in the A share market.

In recent years, whether the IPO supervision red line is introduced, or the registration system has been fully rolled out, its essence is also to ease the speculation of new shares, so as to make the market return to rational investment atmosphere.

However, it is a pity that in practice, many reform policies have not changed the investment tendency of the market obviously. On the contrary, there is a trend of further strengthening.

In the middle of last year, management layer To control the issuance of the proposed issuing company P / E ratio A regulatory red line was set up for the proposed issuing company, and the price earnings ratio of the relevant proposed companies was monitored in real time.

Indeed, at the time of issuing the new red line policy for IPO, more or less restrictions on the price earnings ratio of some high issuance companies will be issued. However, in the final operation, it triggered the stir up of new shares, and retail investors were hardly involved in the rising market.

Meanwhile, the Shanghai and Shenzhen Stock Exchange also revised the new IPO strategy. Market value rationing Method, the calculation caliber of investment holding market value is changed to calculate daily average market value according to the 20 trading days before T-2. As a result, it has accelerated the expansion of new funds and further stimulated the market to play a new role.

Obviously, in the two tier market, the attractiveness of the investment downturn, market funds are more keen on "fight new." The analysis of the average increase after the first few rounds of IPO can basically maintain a good rate of return on investment. In other words, once investors sign up, they can get the chance of doubling, much better than their operation in the two tier market.

However, from another perspective, the phenomenon of lack of money in the market has given some investors a better hedge against repurchase operations.

The highest annual interest rate of 65% this Tuesday is indeed better than that of baby products, and it also overtakes many P2P financial platforms.

However, the lack of money in the market is not sustainable. After the new round of intensive issuance of new shares, the repo rate will return to normal. At the same time, after the huge amount of frozen capital is thawed, it will bring new liquidity supplement to the two tier market.