How To Avoid The Risk Of Detours In Future Stock Market Regulation?

Why do investors not make money in the two tier stock market? Fang Xinghai, the vice chairman of the new SFC, gave his answer as early as September 2012 when he attended summer Davos in Tianjin. Fang Xinghai believes that there are three reasons why investors in the two tier stock market do not make money. First, the IPO process involves too much government, resulting in very expensive IPO prices; two, there are a lot of rules and regulations in the stock market, and too much death; three, too few dividends from listed companies lead to less investor returns.

To change the situation that investors do not make money in the two tier market, the key is to relocate the Chinese stock market and further improve the laws and regulations of the Chinese stock market. The stock market can not only serve the financing, but also serve the investment, protect the interests of investors and punish all kinds of illegal activities. If the problem can not be solved effectively, then investors want to make money in the two tier market.

Now, looking back at what Fang Xinghai said at that time, the three reasons were actually specious, or just saw something on the surface, and did not really find the real reason why investors in the two level stock market did not make money. Of course, if Fang Xinghai does not serve as vice chairman of the SFC, this specious nature should not be taken care of. But now that Fang Xinghai is indeed the vice chairman of the SFC, then this paradox seems to be somewhat inappropriate. Otherwise, the future stock market regulation will be dangerous.

For example, in order to enable the stock of listed companies to be able to High price issue The existing laws and regulations only stipulate a small share of the public stock, such as a 25% shareholding ratio (400 million of the total share capital, 10% of the public share). The proportion of state-owned shareholders and other non tradable shareholders is as high as 75%. Such a small share issue naturally raises the price of IPO. Although the stock market began to carry out the share reform in 2005, this unreasonable equity structure has not changed. The change is that the size can not be listed for circulation. Such a size can be sold at a high price. This unreasonable equity structure also protects the interests of large and small shareholders objectively, making the stock market a large shareholder's ATM.

For example, we should tolerate or even shield the illegal activities of listed companies. The most obvious is the fake listing, and the Securities Act is only a small fine. For example, the 189th provision of the securities law stipulates that the issuer is not qualified for the issuing conditions and fraudulently defraud the issuance approval. The securities issued have been fined by more than one percent or less of the amount of illegally raised funds. The persons directly in charge and other persons directly responsible shall be fined not less than thirty thousand yuan or less than three hundred thousand yuan. Such a fine is even lower than the bank loan interest rate, which is actually a typical cover up. Because of this, it gives the listed companies the power to forge. And if the final interest is damaged, it will still be natural. Secondary market Investors on the market.

Again, because of the widespread listing of counterfeiting, including the listing of enterprise packaging, this makes it possible. Listed company The quality is poor, investors can not get the corresponding return on investment, so they can only make money by fighting against the difference in the market. Speculation in the market has prevailed and speculation in the stock market has become popular. This also exacerbates the volatility of the stock market. Investors in the two tier market will suffer losses as a result.

All of this is obviously due to the Chinese stock market's emphasis on financing function. Back to Fang Xinghai's question that the price of IPO is very expensive, is that not the result of the above reasons? On the one hand, the abnormal ownership structure has led to the high price of IPO; on the other hand, due to the lax legal system, the issue of jointly manipulating IPO pricing between issuers, sponsor agencies and inquiry agencies can not be punished. What's more, the IPO company's listing on inferior quality and packaging has further raised the IPO price. As a result, investors in the two tier market will only have to pay the bill.