Leverage And Registration System Coexist, Deepen Financial Reform And Stabilize Stock Market

Leverage and registration system coexist and stock market can be stable.

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As the bottom picks up and the Shanghai stock market stands on 4000 points, stabilizing the market will enter a new stage.

In the long run, we must rely on development and reform to achieve financial stability. In order to achieve positive and long-term financial stability, we must further deepen financial development and reform, foster a strong financial system and enhance the ability to resist risks.

From this we can see that stabilizing the market and reform are not contradictory, and the pace of reform will not stagnate because of the extreme market or bailout.

To this end, in my view, a more urgent task at the next stage should be: the regulators should reflect on the extreme market and related countermeasures in the early stage, and on this basis, plan for the future regulatory and reform path, clear and stabilize expectations.

The imbalance between market supply and demand leads to bubbles and slump.

Frankly speaking, I am psychologically prepared for the recent situation of A shares.

I remember at the end of December last year, I once said "no more retail investors to pay for the bull market".

Market persistence will be inversely proportional to the rate of increase.

If it goes too fast, the market may be short-lived.

Because of the defects of market system, most of them are paid by retail investors.

In the column at the end of April, what should we do around 4300? It reminds us that as an emerging market, "A" is hard to achieve in the short term.

Since investment is different from gambling, and now "playing with heartbeat", at this point, if the psychological pressure is too high, it will not be too bad to choose to leave.

I believe that many investors, like me, are psychologically prepared for the collapse of the market after the early surge.

It is just that we do not know the specific time points and the intensity of market fluctuations.

In these days, many people are pondering over the question: Why did A share collapse? Many people may say that it is an over-the-counter allocation, a leverage mechanism, which is caused by the issue of new shares, or even the false news of "jumping off the building".

However, these can only be described as "external manifestations".

In fact, the root and nature of the plunge should be only one: "the bubble is serious" (on the eve of the collapse, many small and medium capitalization stocks have entered the era of "market dream").

As we all know, when the "bubble is serious" to a certain extent, then it is bound to burst.

Although the breakdown of the fuse, process and mode may be different.

For example, the existence of some high leverage tends to cause stampede, thus speeding up the burst of bubbles.

To this end, we can further infer that the collapse is in fact due to the "pre surge", or that it is not a slump that has hurt you, but that it has caused you to rise or fall. It is the early surge that has tempted you to enter or add to the warehouse, and led to a subsequent collapse.

In this way, it is more meaningful for investors or regulators to explore the reasons for inflation than "the reason for the collapse".

So why did A shares soared in the past few years? There should be many specific external reasons, but it is easy to see that a basic market logic should be,

Imbalance between supply and demand.

In the first half of the year, on the one hand, capital gains and leveraged mechanisms were pouring into the market.

However, on the other hand, the listing and financing of enterprises are still controlled.

Although we see that in the 1-5 month of this year, regulators warned the market for 8 times (called "eight gold medals").

However, just like "shouting can not save the market", "gold medal" can not restrain the impulse of capital admission.

The imbalance between market supply and demand will inevitably lead to stock scarcity, and capital will go into the market to raise funds, which will lead to skyrocketing.

The reduction of large shareholders weakened the degree of imbalance between supply and demand.

The above analysis and inference are common sense.

Nevertheless, there are still many people who have misunderstandings, including some experts.

For example, an economist wrote articles criticizing the reduction of large shareholders: "(first half) large shareholders and executives of listed companies concentrated cash holdings 500 billion yuan detonated a sharp decline in stock index".

But this view should be very problematic.

As "guess the top" is unrealistic and meaningless, the author does not want to argue.

What exactly is the fuse?

But we know that on the eve of the collapse, A shares have entered the era of "market dream". If big shareholders choose not to reduce, are they stupid?

According to the logic of the above experts, should the large shareholders be not allowed to be reduced? Will the A shares always be "only rising without falling"? The bubble will never break? Obviously, it is unrealistic.

In fact, based on the above analysis, the author's view is just the opposite.

The author believes that the reduction of large shareholders and the issuance of new shares actually save more or less retail investors.

This is because when the market supply and demand is unbalanced, and when the stock supply can not keep up with the investors' demand, "the reduction of large shareholders" and the issue of new shares actually increase the supply of stocks, weaken the severity of the imbalance between supply and demand, and slow down the pace and amplitude of the bubble blowing.

Just think, in the first half of the year, if there is no "big shareholder reduction" and the new stock market and other market-based ways to increase the supply of stocks,

A shares should go up faster and higher, and investors will become more crazy.

It can be imagined that no matter what the fuse leads to the bubble burst, the bigger bubble will cause more serious consequences. When the bubble burst, the difficulty of rescuing the market will inevitably increase, and the losses of investors will certainly be even more painful.

From this perspective, investors in the two tier market, especially those with high leverage, should be grateful for the "big shareholder reduction" in the first half of the year.

According to the above analysis and reasoning, to reduce the extreme market such as skyrocketing and plummeting, the most important thing is to prevent and avoid "imbalance between market supply and demand".

Looking at the A-share market in the past year, we will find that, regardless of whether there is any over-the-counter allocation, under the leverage mechanism, when the market is better, the market capital will show a geometric multiplier growth.

It goes without saying that this will greatly increase the difficulty of regulators trying to regulate the market.

The result is that funds are not restricted, and leverage mechanisms are used as accelerators, but financing projects are limited, which will lead to distortions in the pricing mechanism of the market.

In fact, unless there is an extreme market like the preceding period, the work of regulators is by no means regulating the market.

Its focus should be on regulating the market.

Historical practice has proved that the government can not replace the market means to make the A share market get an effective dynamic equilibrium.

Therefore, since the prevailing market was faster than expected, the only thing we could do was to push ahead with the reform.

At least we can first clarify the registration schedule.

Unfortunately, we missed a good opportunity.

This extreme market gives us an important lesson: the introduction time of the lever mechanism and the time of registration are not too long.

If the two exist together, the quantity of funds and the quantity of financing projects will continue to interact, and the market will continue to achieve dynamic equilibrium.

That is to say, that is to say, the entry of funds is market-oriented and leveraged, so the listing of enterprises must also be marketization. Otherwise, the supply and demand of the market will easily be out of balance, so that it will rise and fall sharply. The so-called "slow bull" is just empty talk, let alone for the real economy pfusion.

In fact, it is worrying that compared with the lever mechanism, the slow progress of registration system may not be related to scientific analysis or procedural problems, but to interests.

Because the former will raise the stock price, that is, raising the value of listing qualification, thereby enhancing the price of power rent-seeking. The latter is to weaken power and let power rent-seeking disappear.

A few days ago, a friend and I joked, "in the next six months, it may be the prime time of A shares. Large shareholders can not reduce their holdings. IPO stops. Under the background of excess liquidity, if a story comes to light, the stock market will probably rise."

I do not know if this "story" will appear, there is no market, but I am clear that in the context of IPO suspension, under the role of leverage mechanism, the imbalance between supply and demand is indeed possible.

At that time, the more the A shares soar, the more likely the stock market crash will be.