The Importance Of Saving The Market And Safeguarding The Stability Of The Stock Market

Even if you just look at it.

It is also wise for the government to rescue the market vigorously.

The government creates the market to promote the prosperity, progress and common prosperity of the whole society. When the excessive polarization between the rich and the poor occurs, it needs the government's hand to manage and regulate it.

The creation of market rules is to ensure fair pactions, while helping the weak is a manifestation of social justice.

Stock market stability is to promote social justice.

From the end of June to the middle of July, China's stock market can be described as thrilling. The Dubai stock market has been used by cattle for 42 days, and China has doubled.

However, various countries have also fully appreciated the tremendous energy when the Chinese government is determined to intervene in the market.

In July 18th, Zhu Guangyao, Vice Minister of finance, said: "a sharp pullback in China's stock market is a normal phenomenon. Under such circumstances, the Chinese government has intervened in accordance with the experience of the developed countries such as Europe and the United States, and has acted in a timely and appropriate manner to achieve the goal of stopping market panic and stabilizing the market.

The goal of stabilizing the market has been achieved, but the debate about rescuing the market is far from being terminated.

As the Financial Times said, China's regulators will pay a price to intervene in the stock market.

It may not be included in the MSCI emerging market index in the near future.

AXA's investment strategy chief said that what happened in the past few weeks in China's stock market may change international investors' views on the Chinese market, which may cause serious impact on the credibility of the Chinese government, which may be worse than the stock market crash.

Even in China, the different voices about rescuing the market have never ceased. Many people believe that the government has intervened too much in the market and affected the fair trade under the rules, which is a retrogression in the market.

I think maybe some people didn't realize what the government did at that time.

In the second week of July, a week of intensive intervention in the market policy, while the stock market continued to plummet, another volume market, the inter-bank bond market, ushered in a surge of subscription market. Many bond traders were busy, and even time for lunch had been given up. Good luck traders could even complete half year's task targets in a week.

In the offshore market, the forward price of US dollar (6.2096, 0.0001, 0%) climbed rapidly, and the pressure of RMB depreciation increased significantly.

When the players are still bringing forth new ideas for the stock market, this huge fluctuation caused by the A share market has already been pmitted to the bond market and the foreign exchange market.

If we do not take prompt measures to cut down the pmission chain and calm the source, we are faced with the great changes in stock market, but the chain reaction and resonance between bond and foreign exchange market.

China has the largest corporate debt in the world. According to Bloomberg statistics, the debt to equity ratio of non-financial listed companies has exceeded 200%, and the US dollar and other foreign currency bonds issued by enterprises have nearly $209 billion 200 million.

The leverage ratio of China's speculative enterprises has been at least the highest since 2004, and debt to net assets ratio has also hit the most since 2007.

If this time

Being affected, it may cause a series of events such as cross default and shake up the real economy which is not prosperous. This is a real big event.

As far as the foreign exchange market is concerned, in the long run, the RMB is indeed under the pressure of depreciation, but at the moment, China must maintain the stability and relative strength of the RMB exchange rate, so as to continue to go on the road of internationalization.

According to the bank for International Settlements, the real effective exchange rate of the RMB was second in the global currency in June. In the first half of the year, the effective exchange rate of the RMB rose by 2.95%, and the nominal effective exchange rate rose by 3.64%, which is not easy for the central bank.

If A shares are going to be derogated, they will inevitably be painstakingly turned into worries of the east stream.

If these three problems arise at the same time, they will not be the respective problems of the three markets. It may be a financial disaster.

At this time, it is still hesitant to intervene in the market whether it violates the guiding principles of textbooks. It is as if the house is on fire and still worried about breaking the doors and windows to escape correctly.

Even if we look at the stock market simply, it is wise for the government to rescue the market vigorously.

The government creates the market to promote the prosperity, progress and common prosperity of the whole society. When the excessive polarization between the rich and the poor occurs, it needs the government's hand to manage and regulate it.

The creation of market rules is to ensure fair pactions, while helping the weak is a manifestation of social justice.

This is the reason why the deposit insurance system widely practised in the world is most protected by the small savings depositors rather than the large deposits.

China's stock market is huge, but it has a significant difference from the developed countries such as the United States, that is, a large number of retail investors.

According to the data of Zhong Deng company, by June 30th, holding A shares.

The accounts of natural persons over 500 thousand yuan have dropped to varying degrees in various regions.

Among them, the number of accounts for 500 thousand - 1 million decreased by 85 thousand and 500; the number of accounts for 1 million - 5 million decreased by 127 thousand and 500; and the number of accounts for more than 100 million also decreased by 406.

In the same period, the number of institutional investment holdings increased significantly.

Among them, the number of accounts from 1 million to 5 million increased by 328; the number of accounts for 5 million to 10 million increased by 193; and the number of 10 million to 100 million accounts increased by 743.

It can be seen that retail investors are the biggest victims of the stock market crash.

At the beginning of the July, when there was a confrontation between the two sides, some single stocks appeared on a daily basis. It was not a big deal for retail investors. The government launched the bailout, which objectively helped many small investors with information asymmetry. Many international critics did not think about the above reasons.

Of course, for the government to rescue the A share market, the international voice is not all one-sided. The global head of the MSCI index research indicates that the A share index is not "yes" but "when".

The events of the past few weeks in the Chinese market are very serious, but they are still on our observation list.