The First Trading Week Of The New Year, The Ups And Downs Of The Stock Market

The central economic work conference pointed out that this year is the year of tackling key structural reforms, mainly focusing on five major tasks: capacity production, inventory elimination, deleveraging, cost reduction and compensation.

To carry out these five key tasks, we need to do well in all aspects of "addition, subtraction and multiplication and division". Among them, it is very important to expand the proportion of direct financing and give full play to the role of capital market.

In January 4th, the first trading day in 2016, the first day of the fusing mechanism, the Shanghai and Shenzhen stock markets fell sharply in early trading. Shortly after the opening of the afternoon, the stock index hit 5% and 7% fuses and closed ahead of schedule. Shanghai and Shenzhen two cities staged "1000 stock limit".

In January 7th, only 10 minutes after the opening of the morning, the market fell 5%, once again hit the fuse line. After 15 minutes, the paction was less than two minutes. The stock index fell 7% to fuse, and the whole day was suspended.

In the first week of the new year, Shanghai and Shenzhen stock markets fuse at 4 degrees.

When the Shanghai Composite Index fell 9.97% in the week, the Shenzhen composite index fell 14.02%, becoming the biggest weekly decline since the current round of market adjustment.

The trend of the stock market is influenced by many factors, such as economic finance, long term short term, domestic and foreign investors' psychology, and so on. The design of market system is only one of the many factors.

Some analysts believe that under the joint action of large shareholders' reduction of the ban on the expiration of the ban, early adjustment of institutions and the failure of economic data (PMI) and other factors, the market is facing downward pressure.

On the evening of January 7th, the three major exchanges also announced that the relevant provisions of the index will be suspended from January 8th.

When explaining the reasons for suspending the index melting mechanism, a spokesman for the SFC said that the main purpose of introducing the index fusing mechanism was to provide the market with a "cooling off period" to avoid or reduce the hasty decision making under the circumstances of large fluctuations, and to protect the legitimate rights and interests of investors, especially small and medium-sized investors.

However, judging from nearly two actual fuses, the expected effect has not been achieved.

There is also a certain "magnetic attraction effect", that is, some investors are trading ahead of time when the threshold is close to the melting threshold, which results in the acceleration of the index to touch the threshold of fusion and plays a role in helping to fall.

Therefore, the spokesman said that weighing the pros and cons, the negative impact of the fusing mechanism is greater than the positive effect.

In order to maintain market stability, the SFC decided to suspend the fusing mechanism.

Consolidating market base and improving system construction is the need to promote the steady and healthy development of the market, and it is also the need to tackle structural reform.

Only in this way can we boost investor confidence in the market, effectively play the role of market allocation of resources, and cultivate an open, pparent, long-term stable and healthy development of the stock market.

At present, China has entered the new economic normal, and the economy is evolving from extensive to intensive, from simple division of labor to complex division of labor.

In order to give full play to the great potential and strong advantages of our economy, we must accelerate the pformation of the mode of economic development, speed up the readjustment of the economic structure, and accelerate the cultivation of new growth momentum.

To this end, the central economic work conference, which was recently concluded, put forward that we should focus on advancing structural reforms on the supply side.

The structural reform of supply side is to give full play to the decisive role of the market in the allocation of resources. By further improving the market mechanism, it corrects the distortion of the allocation of factors that have been too much reliance on administrative allocation resources.

To adjust all kinds of distorted policies and institutional arrangements, and lay a solid foundation for structural reform, we need to give full play to the role of the capital market and cultivate a stable and healthy stock market.

In this regard, there is a view that the supply side reform around the four elements, and the capital market can play an active role.

On the one hand, the capital market itself is an important component of the "technology and system" element. The healthy development of the capital market contributes to the progress of technology and system. On the other hand, the capital market can provide a platform for the vitality of the activation elements, improve the securitization rate through IPO, asset injection, and so on, and improve the concentration degree of the industry through mergers and reorganization, so as to stimulate the enterprise's innovation ability and national economic vitality, and help pform the indirect financing from the bank as the main body to the direct financing with the stock market and the bond market as the main body, so as to reduce the cost of the enterprise's financing.

To capacity,

The demand is reflected in the financial sector, which is to improve the financing structure and reduce the overall leverage of enterprises.

For the current financing system mainly based on indirect financing, such as bank loans, on the one hand, the banking sector needs to focus on optimizing the credit structure; on the other hand, it needs to significantly increase the proportion of direct financing.

The executive meeting of the State Council held in December 23rd last year pointed out that we should intensify the reform of the financial system and optimize it.

Actively developing direct financing will help broaden investment and financing channels, reduce social financing costs and leverage ratio, and push forward the reform of supply side structure.

To this end, the executive meeting of the State Council proposed that we should improve the multi-level capital markets such as stocks and bonds, and establish a new strategic board for Shanghai stock exchange.

Of course, to give full play to the role of the capital market and help structural reform, the key is to constantly consolidate the stock market basis and maintain healthy development of the market.

Whether it was the eleventh meeting of the central financial and economic leadership group held last November or the central economic work conference last year, it made specific arrangements for the development of the stock market, which called for the formation of a stock market as soon as possible, with complete financing function, solid foundation system, effective market supervision and full protection of investors' legitimate rights and interests.

Among them, emphasizing the "solid foundation system" is to strengthen the construction and improvement of the basic system of stock market and build a solid foundation for market development.

We must see that China's stock market is still in the stage of "emerging + pition". Despite rapid development, the market function is extremely unbalanced and the market structure is distorted when the underlying system is not perfect.

Therefore, only by improving the basic system as soon as possible can we cultivate a healthy stock market.

The introduction and suspension of the fusing mechanism are all efforts to build the basic system.

The haze of the first week of the new year will be over. The basic system construction and improvement measures will continue to follow. The stock market will return to reason after experiencing "labor pains".

Only healthy development of stock market can provide strong support for structural reform.