Will A Share's Chinese Style Fusing Mechanism Repeat Itself?

In 2016, the performance of China's stock market was much more calm than that of 2015, and the overall volatility was significantly reduced. But the market at the beginning of this year is a bit special. Although the Chinese style fusing mechanism has become a history, the introduction of the Chinese style fusing mechanism has had a huge impact on the market. Obviously, at the time of major policy making, we need to take full account of the market's ability to bear and the vital interests of investors, so we should not allow such tragedies to happen again.

Entering the 2016, A shares ushered in the Chinese style fusing mechanism, whose purpose was to reduce the volatility of the stock market and enhance the stability of the market. But after the introduction of the Chinese style fusing mechanism, its impact was totally out of the expectation of the market. In less than a week's trading hours, the A share market fell more than 400 points, the largest cumulative decline of more than 10%. During this period, A shares toured the fuse threshold and completed the closing market ahead of schedule.

In the evening of January 7th this year, the three major exchanges officially announced the suspension of the fusing mechanism since January 8th and finally ended the fate of the Chinese style fusing mechanism. It can be seen that although the Chinese style fusing mechanism has not been implemented for a long time, its impact on the entire capital market is far beyond the market expectation, causing a huge market loss to the stock market.

Today, the rush to close the Chinese style fusing mechanism has been nearly 1st Anniversary years. However, for many investors, the influence of the Chinese style fusing mechanism is rather far-reaching and lasting. Even some investors can not get rid of the psychological shadow caused by the Chinese fusing system.

In fact, from the analysis of the application of the global mature market, the fusing mechanism itself is not very big. Moreover, in practice, the fusing mechanism can still play its positive role. But why does the Chinese style fusing mechanism fall into a different way?

First of all, the corresponding market environment needs to be considered.

In Chinese style Fusing mechanism Before the introduction, China's stock market just went through a terrible stock market crash. At the same time, taking into account the risk of reducing stock market volatility and preventing systemic pressure, the emergence of Chinese style fusing mechanism is quite important. However, under the actual circumstances, the Chinese style fusing mechanism was introduced hastily, and the actual situation of China's stock market was not fully taken into account.

Moreover, the specific rules of the Chinese style fusing mechanism do not seem to take full account of the market. Panic environment The degree of emotional response.

In the specific rules, the Chinese style fusing mechanism has a 15 minute cooling off period design, and sets 5% and 7% two fuses threshold. However, under the actual circumstances, the design of this calm period is easy to gather the panic of the market. Once again, it will release the panic. As a result, the final result is that the market panic is calm, but on the contrary, it aggravates the panic. After hitting the market again, it quickly reaches the threshold of 7% fuses, and closes the market ahead of schedule.

In addition, the Chinese style fusing mechanism is established. Price limit On the basis of. At the same time, it takes Shanghai and Shenzhen 300 index as a reference standard. As a result, in the actual operation, the Chinese style fusing mechanism is prone to "superfluous" problem, and more often than not, when the Shanghai and Shenzhen 300 index hit 5% of the fuse threshold, many stocks have long been in a downward trend, and at this time the role of fusing is greatly reduced.

Although the Chinese style fusing mechanism has become history, the introduction of the Chinese style fusing mechanism has had a huge impact on the market, and in the short run, it has evaporated the large market capitalization of the stock market, and it is also enough to write into the historical annals of the Chinese stock market.

For nearly a year, for investors, we should actively learn from the experience and lessons of the Chinese style fusing mechanism. Obviously, at the time of major policy making, we need to take full account of the market's ability to bear and the vital interests of investors, and not to let the tragedy of the Chinese style fusing mechanism end again.