What Does The Fusing Mechanism Bring To The Stock Market?

Monday morning, the Shanghai and Shenzhen two cities opened lower, and then continued to fall sharply, as of noon closing stock index fell nearly 4%; afternoon opening, the two cities continued to expand, the Shanghai and Shenzhen 300 index expanded to 5% in the afternoon 13:13, triggered a 15 minute fusing mechanism, stocks suspended trading comprehensively; two cities resumed trading at 13:28 before dropping again, the Shanghai and Shenzhen 300 index expanded to 7%, triggering second gear fuses, two cities suspended trading to close, finally the Shanghai stock index reported 3296.26 points, fell to 7% points, fell to the aggregate;

In the two cities, 1400 stocks were closed down and became black and dark.

Judging from the disk, the first time we hit the fuse was at 13:23, hitting the second fuse at 13:34, from 5% to 7%, and only used 6 minutes, which can be said to fall. This shows that under the fusing mechanism, the panic of investors is spreading further, so that the market anticipates that the fusing mechanism will smooth the market fluctuation and become a laughing stock.

I always do not care about the fusing mechanism. It is that China's stock market is a highly emotional stock market, scattered sheep, and scattered institutions, and the market fluctuates greatly. What we are doing is the trend market. Under the negative effect, once the market is weakening, everyone will have fear. Especially under the fusing mechanism, everyone is worried that their chips can not be sold, so they are eager to lower the price and sell them, so that the fusing mechanism will become a sharp weapon for the market to help fall, and magnify the negative effect of the market.

Of course, the reverse is also true. Once the market sentiment is high and the market is going to rise, then everyone will compete to catch up with the operation, for fear that they will not get the chips.

So quickly hit the blow up.

Therefore, the fusing mechanism can not smooth the fluctuation of the market. Instead, it leads to a sharp rise and fall in the market, amplifying market volatility and increasing the spread of market panic, thus increasing market risk.

Therefore, in terms of stock market policy, we should pay special attention to the control of bad profits, clear the expectations of the market and stabilize the expectations of the market, so as to avoid irrational drops in the market.

There are two main reasons for the fall of the market today. One is that the CFA has failed to make a statement. The other is that the rhythm of the new stock market has not been predicted. As for the collapse of the RMB, it is just another fuse of the stock market crash. The RMB has not fallen sharply, and the stock index is also unable to escape the fall of the.

In recent days, the voice of increasing the proportion of direct financing in the market has been increasing one after another. On the morning of December 25, 2015, on the regular briefing of the State Council policy, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that the executive session of the State Council recently passed the "Implementation Opinions on further improving the proportion of direct financing and optimizing the financial structure".

The implementation of the proposal mainly solves three problems, one is to reduce the financing cost of China's real economy, the two is to reduce the leverage ratio of our enterprises, and the three is to disperse the risks of China's financial system.

By 2020, the direct financing system of marketization, wide coverage, multi-channel, low cost, high efficiency and strict supervision had been basically built, and the proportion of direct financing increased significantly.

The monetary policy committee of the people's Bank of China convened in Beijing in the fourth quarter of 2015 to raise the proportion of direct financing and reduce the cost of social financing.

With the Shanghai Stock Exchange's strategic emerging version, the Shenzhen stock exchange is also not to be outdone, to restart the Shenzhen Stock Exchange's main board IPO, the two exchanges compete for listing resources have been white hot, and the market IPO barrier lake is still serious, as of December 17th, has accepted the first 718 enterprises.

Among them, there were 67, but not 651.

633 enterprises that normally fail to be heard in the enterprise have not been passed, and 18 enterprises have been discontinued.

The IPO task has been very arduous in the past 16 years.

The IPO market is hot, but the market capacity is somewhat weak. How to balance the balance between investment and financing has become a difficult problem for management. It has also become an object of great concern to investors. From the management level, the registration system has been difficult to reverse. The core idea of registration system is to release the listing price and the rhythm of listing. This is undoubtedly the beginning of a disaster in the current market conditions, so the management has proposed a two-year buffer period. However, how to arrange the listing rhythm in the buffer period is always a mystery, which is a great mystery for investors.

It is precisely because of the very unclear rhythm of IPO, which is very elastic, investors are always in an unstable mood, we must guard against the SFC's massive impact on the market, making investors nervous and even mentally handicapped, and how the market can run smoothly, while the stock market is focused on stable expectations, so the market trend in recent years is very uncertain.

As a buffer period, the author recommends that the SFC draw lessons from the practice of total amount control in the past year, and formulate an annual financing plan according to the principle of roughly equilibrium, including the total amount of annual financing and the number of Listed Companies in the year. The number of listed companies can not be more than 200 in the author's view, that is, every trading day. If the market is hot, the annual increase is over 20%, which can be considered to increase by 20%. The total annual financing control will be around 250 billion yuan, according to the market changes, the increase can be increased by 20%.

In turn, if the annual decline is over 20%, the number of listed companies will be reduced by 20%.

Total quantity.

Under the principle of equilibrium, let the market arrange the listing of the company itself.

The capital market must be paid. It is impossible for one side to take all the market benefits alone. If we want to get rich overnight, we must be strictly restricted if we reduce our holdings and take away the money. Otherwise, we will take away all the benefits from the industrial capital, and how the investors should face the stock market.

I think the future trend of China's stock market depends on the new regulation of IPO rhythm and industrial capital reduction. As long as these two market risks are not eliminated, the trend of China's stock market will not be optimistic for 16 years. Even if the stock index has rebounded for some time, it will not stop the stock index from continuing to fall, or even lose the financing base of the stock market, and let the stock market support the real economy.

As long as IPO is expected to be pparent, there is a new regulation that can make the market feel affordable and reduce industrial capital.

Then the market trend will be relatively optimistic. The fusing mechanism may turn into a good amplifier and become an effective tool to help the market.

There is no big mistake in the government's efforts to increase direct financing. However, the only prerequisite for increasing the proportion of direct financing is the smooth operation of the stock index. Once the stock index runs smoothly, the financing function of the stock market will be abolished. If the shareholders want to pay for the real economy, at least the stock market needs to provide certain returns for the shareholders. The industrial capital will become rich overnight, and the stockholders can at least have a porridge to eat and drink. Otherwise, the stock market will become a market with a loss of investment and financing function. The sounding point is that the balance between investment and financing is essential.

After the slump of the end of June, the securities and Futures Commission issued the No. 18 article, which ended the industrial capital reduction. However, the termination was forced down by the SFC. It was not the result of voluntary market. Once the policy was approved, the original reduction would add a new reduction to the market, so that the market could see a wave of reduction.

Article 18 has not yet expired. As a preheating, many companies have issued a reduction notice, striving for the first time to complete the reduction behavior.

How much pressure does the market reduce? According to CICC, if there is no

Under the circumstances, the market will face at least 150 billion yuan reduction pressure after expiration of January.

It is estimated that the net reduction pressure in the 1 quarter will be around 350 billion yuan, which accounts for about 7% and 17% of the current stock market capital of 20400 billion yuan. This is calculated according to the existing stock fund. If the market continues to fall, investors' confidence will be lost, and the stock fund will continue to flow out, which will increase further. This is a serious test for the capital side. The reduction of industrial capital will not only affect the capital side, but also affect the confidence level. The former prime minister believes that confidence is more precious than gold. Once confidence is lost and panic spreads, it will be very difficult for the market to return to strength.

Therefore, it is necessary for us to further improve the new regulation of industrial capital reduction and prevent the large proportion of industrial capital from being sold. It is a matter of urgency for the large scale financial commentators to attribute the stock market crash in the first half of the year to the cash reduction of industrial capital. Although the viewpoint is a bit excessive, the truth of it is worth paying much attention to. The author still inclines to the original view that the scale of industrial capital reduction can not exceed 1% of the free circulation market value. As for arranging the reduction, it is a matter for the listed companies themselves to discuss.

All fines for violation of regulations should be fined at the same amount and ordered to repurchase the same shares, instead of being punished by 3-5% penalty only.