China'S Capital Market: 2016 Is Destined To Be Extraordinary

The first trading day of the new year is the day when the fusing mechanism comes into effect, and is also the day when it begins to play a role.

In January 7th, the fusing mechanism was once again "visible". The trading day only lasted 15 minutes, creating a new record in the A share market.

Because the negative effect is greater than the positive effect, the fusing mechanism has been halted and become a "short life" system innovation.

From from January 4th to 11th, in the short 6 trading days, the Shanghai stock index again appeared "cliff type" decline, of which, in January 4th, January 7th and January 11th respectively fell 6.86%, 7.04%, 5.33%, the tragic situation of 1000 shares fell again, tens of millions of small and medium-sized investors are also suffering in pain.

In January 12th, the Shanghai Composite Index fell below the 3000 mark, and the market's weakness was self-evident.

The sudden collapse of the stock market highlights the fragility of the market, which is also related to the stock market crash that happened last year.

From mid June to the end of August last year, there was a stock market crash in the A share market. Its severity has been rare since the birth of the stock market.

Although there are strong regulatory authorities to save the market, but in the short term, the stock index's decline is as high as 45%.

The stock market has plummeted and all kinds of funds are fleeing. Otherwise, investors may be at a lower price, and their losses will also become more serious.

The stock market crash has also been exposed in the new year's stock market crash, such as continuous slump, 1000 stock market down, and investors' behavior of selling stocks almost regardless of cost. All of them were caused by last year's stock market crash.

In fact, the frequent slump in the market is essentially a manifestation of a serious lack of investor confidence.

In fact, the A share market has never been short of funds, but investors often lack confidence in the market.

To see which bull market is not going to be brilliant under the impetus of huge sums of money?

They have abandoned the market and fled. "Bull" short "bear" has become the most realistic portrayal of the A share market, which is essentially the lack of confidence of investors in the market.

How can market confidence be eaten up? Perhaps we can see some clues from the relevant rules and regulations promulgated by the regulatory authorities.

As of October 2014, the China Securities Regulatory Commission formally issued some opinions on reforming, improving and strictly implementing the delisting system of listed companies. The biggest highlight of the new rules for delisting is not initiative.

Instead, it is the implementation of a major delinquent company compulsory delisting system, including fraud issuing companies and major information disclosure companies.

Obviously, whether it is a fraud or a major information disclosure of illegal behavior, is a serious violation of illegal behavior, for such a listed company, it should be resolutely put it out.

However, the "new rules for delisting" also stipulates that before a stock exchange makes a decision to terminate the listing of a company's stock, the company can make a full correction of the illegal act, timely remove the responsible person and make proper arrangements for the civil liability for compensation. The company can apply for a resumption of listing to the securities exchange.

And,

A decision should be made within the prescribed time limit to allow the stock to resume listing.

Inconsistent regulations require regulators to open a window for illegal companies while closing a door.

Investors do not have confidence in the market, in fact, is gradually being eaten.

Obviously, the above systems have significant loopholes, not only can not play the role of protecting investors, but also can not enhance investor confidence in the market, and there are many similar examples.

The regulatory authorities allow companies to resume listing on a regular basis. Their starting point is to protect the interests of the illegal investors and avoid the shock of the stock market. However, in protecting the interests of a small number of investors, the authorities actually connive at the behavior of the offenders, so that they can not get the punishment they deserve, nor do they allow them to pay the price they deserve.

There will be desperate people in the market, and ultimately the whole capital market and more investors will pay for it.

For example, in January 8th this year, the major shareholders of the listed companies and the Dong ban Gao's ban on sale were expired. In order to prevent the impact of the big shareholders and Dong Jian's high holdings on the market, the SFC issued a number of regulations on the major shareholders and directors' holdings of shares of listed companies recently, such as the large shareholders of listed companies holding shares through centralized trading in the stock exchange, and they need to disclose the reduction plan 15 days ahead of schedule.

Moreover, large shareholders' bidding for trading within 3 months should not exceed the 1% of the total number of shares of listed companies.

The data show that bulk trading is the main way to reduce the holdings of major shareholders of listed companies, and through large pactions, large shareholders can achieve bridge reduction, can be reduced to zero, and can also avoid tax.

Obviously, the reduction of the new regulation has left the backdoor for the large shareholders of listed companies.

What is the meaning of such a regulation? How can it boost market confidence?