Will The Sudden Rise Of The Stock Market Be A Bull Trap?

At the 2800 point crossing, the largest 15 day stock market, "Shenzhen and Shanghai stock market", finally chose the direction today (May 31st): to make a breakthrough in volume and upward.

The Shanghai Composite Index has risen by more than 3%, and the three indexes of the Shenzhen stock market have risen by more than or equal to 4%, and the two cities have nearly doubled their turnover.

This is the decision made by the national team after many days' hesitation. They must kick the ball to their own "forbidden zone", otherwise it is too dangerous.

It is known to everyone that long plates will fall.

The coach knows of course.

The A share's inclusion in the Ming Sheng index and the opening of Shenzhen Hong Kong Tong are neither substantive nor positive.

A shares still face enormous uncertainty, and this uncertainty mainly comes from policies: 1, the central bank's monetary policy may lead to higher market interest rates. If so, A shares will still fall. 2, management will continue to leverage and squeeze bubbles for asset prices.

Therefore, at this time, the first thing to consider is not to rush to raise funds, nor to catch up.

Recently, there are more risks: the depreciation of the RMB against the US dollar (the appreciation of other major currencies) is not good enough, but it can only bring psychological harm. The Fed's interest rate rises rapidly, and China's monetary policy returns to "neutral".

But there are also positive, for example: 1, A shares may be included in the mid June index (MSCI); 2, Shenzhen and Hong Kong through the opening soon, some media speculation that it is likely to be announced before the June 14th Ming Sheng index.

If these two advantages are fulfilled, it will be a great benefit to the brokerage stocks and insurance stocks.

The reason is very simple: if the A shares are successful, the volume of trading in the stock market will increase, and the securities companies will be good. The insurance companies themselves are the "big players" of A shares. They will be sitting on the sedan chair early, and there will be more people carrying the sedan chairs.

This is actually the logic of the two leading plates today.

"National team" led this round of rebound is ingenious, there is a public opinion in front: "Shanghai Stock pass" capital continued inflow.

Although the amount is not large, it can be interpreted as "foreign capital".

"Foreign capital" has always been the "Superman" wearing underwear outside the A share market. They can buy precisely at the bottom and escape accurately at the top, so it has great appeal.

In the past few days, a total of tens of billions of dollars have been poured into the market, so that we can complete the pre paving of the bailout market, which is certainly very cost-effective.

Of course, above is my guess.

Next, let's talk about the issue of A shares incorporated into the Ming Sheng index.

This topic was introduced in May last year, but many readers want me to say it again.

There are hundreds of stock markets in the world, with countless indexes.

The reason why index is necessary is that it can give us a frame of reference, so that we can evaluate stock or general trend.

There is competition between indices, and quality indexes are often the reference for investment institutions to follow.

Ming Sheng index (MSCI) is a series of financial market indices compiled by the American Ming Sheng company (formerly Morgan Stanley index service company). Because of its prestige, it has become the benchmark index used by global portfolio managers.

It is estimated that nearly 6000 fund companies have tracked the MSCI index, with a total capital of US $3 trillion and 700 billion.

When the stock market of a country and a region is included in the index, many fund companies will allocate funds according to their weights.

In other words, if A shares are included in the Ming Sheng index, there will be a certain amount of funds to buy A shares passively according to their weight.

Of course, because China's capital market is not open to the outside world, foreign capital entering A shares is still through QFII and RQFII, so the upper limit of inflow of funds is also restricted by quota.

If

The success of this year's inclusion in the Ming Sheng index can only account for 5% of the weight of emerging markets, with a potential inflow of about $24 billion, or about 150 billion yuan.

But these funds will not be in one step and can only flow slowly.

In the long run, the incremental capital to A shares may exceed one trillion yuan, but it will take 5 to 7 years.

Follow the index of Ming Sheng

The "FTSE", in May 26, 2015, the British index company FTSE announced that China A shares will be included in the FTSE Russell (Russell Russell) index, A shares in the new index of the initial weight of about 5%, international investors into A shares, the weight will increase to 32%.

The impact of the FTSE index is less than that of the Ming Sheng index. At that time, some institutions estimated that after the A shares were incorporated into the FTSE, they would probably increase the demand equivalent to about 35 billion yuan. If the capital market is fully liberalized in the future, a new demand of up to 450 billion can be increased at most.

Therefore, even if it was announced in June 14th that Ming Sheng company announced that the A share should be included in the Ming Sheng index, it would not be a great benefit. Its role in A shares would be like a traditional Chinese medicine, which will play a slow role in the next few years.

Of course, there is also the FTSE index superimposed on it.

But the key problem is that A shares should be cheaper, otherwise the Ming Sheng index and FTSE index will not be able to continue to increase A shares.

。

If investors blindly increase the proportion of A shares because of these indices, and ultimately lose money in large areas, the credibility of the index companies will be impaired.

The large organizations that track these indices have a very large voice. The China Securities Regulatory Commission has met with some major institutions through the Ming Sheng index company and accepted some suggestions, such as improving the resumption of licensing system.

So, how to judge the rebound of A shares today? In fact, the above analysis has been done: This is in June, when the wind and waves are high, a big foot of the national team kicked the ball out of its own "forbidden zone", otherwise it would soon cause big trouble.

The Ming Sheng index and Shenzhen Hong Kong Tong are the opportunities for this "big foot relief".

Of course, there is also a pension market.