Shanghai And Hong Kong Push Short Selling Mechanism Has No Effect On A Shares In The Near Future.

Allow overseas investors to make short A shares through Shanghai and Hong Kong, which inevitably makes domestic investors feel nervous. After all, the A share market is basically a unilateral bull market.

Although the A share market also has margin trading, investors can sell short stocks through margin trading, but investors in the A share market are more accustomed to financing. This is evident from the margin of securities margin trading.

For example, as for the closing of February 17th on the eve of the Spring Festival, the financing balance of Shanghai and Shenzhen two cities is 1 trillion and 105 billion 777 million yuan, while the margin balance is only 4 billion 714 million yuan, almost negligible.

In such a market dominated by a long majority, even "singing empty" is a taboo, let alone "short", especially allowing overseas investors to short the A shares.

However, it is precisely because the A share market is a unilateral multi market, which makes it more meaningful for the HKEx to join the short selling mechanism through Shanghai and Hong Kong.

Since domestic investors are "dead long", then the A share market is more necessary to introduce overseas investors to short the A shares and make a demonstration for domestic investors.

After all, for a healthy developing market, short selling mechanism is essential, especially for the A share market, which is basically a one-way market. It is easy to cause many companies' share price to deviate from their intrinsic value seriously. It needs short selling mechanism to correct the stock price and return it to its intrinsic value.

Moreover, when the stock falls, investors can choose to sell short, not only to reduce losses, but also to make profits.

Therefore, whether for the market or for investors, the short selling mechanism is not a bad thing. As long as it is properly handled, it can enable investors to reduce investment risks and increase investment returns.

How does the short selling mechanism affect the A share?

I think the short-term impact is negligible.

After all, the A share market is a market dominated by mainland investors, and investors are also "dead long". Only a few investors from Hongkong or overseas investors are short sellers. It is hard to really achieve the goal of shorting, and even excludes the short number of overseas investors who will fall into the "people's war" of domestic investors.

Moreover, the Hong Kong Stock Exchange's short selling mechanism launched by HKEx is also strongly branded on the domestic market.

For example, the HKEx has limited the price and quantity of short selling.

Through the short selling pactions conducted by Shanghai and Hong Kong, there can not be unsecured short selling. The selling price of the short selling disk must not be lower than the latest paction price. The selling volume of each short selling stock is 1% per day, and the cumulative 10 trading days should not exceed 5%.

In addition, HKEx will supervise the investors who have a large amount of short selling to prevent illegal trading from causing violent changes in stock prices.

It can be said that under these restrictions,

The short selling mechanism has basically become a "toothless tiger".

As a foreign media has said, "the new rules seem to crack down.

The restriction is so harsh that making short selling as a market vane or valuing adjustment seems to be of little value.

The reason for such strict restrictions is that individuals consider at least two considerations.

First, in order to prevent excessive fluctuation of stock prices, short sellers may set the target if they set the price too low and sell a lot.

Sharp drop.

The two is the A share market, which is dominated by domestic investors. The short selling of a few overseas investors is a risky business.

Strict restrictions on short selling will help prevent overseas investors from shorting the risk.

The reason for such strict restrictions is to be introduced.

Perhaps the explanation given by Li Xiaojia, chief executive of HKEx, is a good illustration of this problem.

Li Xiaojia believes that although the current short selling mechanism is limited in scale and the channel is still relatively narrow, it is an important part of the link between Shanghai and Hong Kong.

He said that at present it is mainly the establishment period of investors and brokerages, but the Hong Kong stock exchange still needs to be opened and developed first.

Therefore, although the selling mechanism is very strict, the introduction of short selling mechanism at least indicates that the short selling mechanism of Shanghai and Hong Kong is "open".

Further, the introduction of Shanghai stock short selling mechanism is not entirely meaningless. At least, it provides a risk management tool for Hongkong investors investing in A shares through Shanghai stock exchange channels. This risk management is not a mere sense of shorting, but a lock up of investment risks or a lock up of investment returns.

This risk management is particularly important for institutional investors.

With this risk management tool, the enthusiasm of institutional investors to participate in Shanghai and Hong Kong will also increase.

This is also important for introducing the mechanism of Shanghai and Hong Kong through short selling.