If A Shares Are Included In The MSCI Index, The Proportion Of A Shares Will Be Greatly Increased.

Now from the market rumors, the A share is included in the MSCI index. It may not be a complete version of the plan, but a reduced version of the plan.

For example, the Shanghai and Hong Kong Tong, Shenzhen and Hong Kong through the A share target into the

In the future, the proportion will gradually increase.

In those days, when the stock market in Taiwan and Korea was included in the MSCI index, it took many years to gradually increase the proportion.

I think this year there is a high probability that there is a reduced version of the plan to put A shares into the MSCI index, although it is a reduced version of the program, but the meaning of A shares is still very significant, this is an ice breaking trip, that is, A shares join the MSCI index, from nothing to the future, there will be a gradual increase in the proportion of space.

For many foreign institutions, once the A share is included in the MSCI index, the internationalization of A shares will be greatly improved, and foreign capital may increase the allocation ratio of A share market, or start configuring A shares.

When I was in May 1, I visited several financial institutions in Wall Street in New York, and I talked with them. Their investment in A shares is not very large. The investment in China is mainly to invest in Hongkong, with a roughly 90% investment in Hongkong and 10% in A shares.

They said that if A shares can be incorporated into the MSCI index, the proportion of A shares will be increased in the future.

In the near future, a conference call with a large financial institution in the United States talked that they might spend several hundred million dollars on A shares in the near future.

One reason is that A shares may be included in the MSCI index in June this year.

This shows that the A share is included in the MSCI index, which is a very important signal and may become a milestone in the development of A shares.

The investment of Wall Street's financial institutions in A shares is very successful on the whole.

They withdrew all the A shares at the end of April 2015, and then invested in A shares through QFII.

At that time, the reason for their withdrawal was that the first half of 2015, the A shares rose wildly, and many stock bubbles had already been large and overvalued. This is the first reason.

The second reason is that at that time, many companies in the A shares were suspended, resulting in liquidity risk.

In hindsight, they still have a high chance of escaping from the summit.

In May 21, 2015, the Qianhai open source fund also chose a high position to escape the roof and reduced the A share position substantially.

Now two years later, the financial institution of the Wall Street in the United States has chosen to enter the A shares, ready to layout A shares in the near future.

From this perspective, we have some hints that some foreign investors are beginning to pay attention to the opportunities of A shares. They also agree with my view that the three major stock indexes in the US stock market have continuously hit a new high, European stock market has risen sharply, the French stock market has reached a new high, and the A share market is hard to remain depressed for a long time under the background of strong rebound of Hong Kong stocks.

A shares at the bottom of the consolidation time is no longer short, more than a year, A shares rose just a matter of time, now A shares have fallen to the bottom, so they choose this opportunity to enter A shares.

If A shares can be incorporated into the MSCI index in June, even if it is a reduced version, it will greatly enhance the confidence of A share investors.

Now the A share market is still in a relatively low overall trend.

In fact, the main reason is that the market lacks money, not liquidity, but the market lacks confidence.

In 2016, the central bank's monetary policy remained relatively loose, and the liquidity of the market was ample. However, the performance of the A share market was rather low.

A lot of money goes around A shares and a lot of money goes to speculation. The housing prices in the first tier cities have risen sharply last year, and even in one year, some of the first tier cities have doubled their housing prices. There are still some funds to buy bonds, and some people to block the commodity futures market.

Why do we go around the stock market? Because after the stock market crash, investors' confidence is seriously insufficient. Some regulatory policies for the stock market tend to be stricter, while some regulatory policies often change, causing some investors to dare not enter the market.

I think the A share market has never been short of funds and lacks confidence. Once the market confidence is revived, the A share market will have a good performance.

Now is the lack of a big positive, an opportunity to stimulate the trend of A shares.

If A shares can be smoothly incorporated into the MSCI index in June, after the inclusion, it may not bring much incremental funding. It is estimated that the incremental capital that may bring to A shares will be tens of billions of dollars.

But in the future, the proportion of A shares may increase year by year.

It is not important how much money it brings. The key is that the A share in MSCI is a major positive signal stimulus.

It is possible to stimulate the earning effect of the A share market and attract more capital to enter the market.

I think this is the A share in June MSCI index, A shares may have a significant impact.

We do not need to stare at the proportion of A shares into the MSCI index. As long as there is a certain proportion, the significance of this signal is very strong.

Now approaching June, we can wait for the announcement of the news.

There is a proverb in the A stock market that five poor, six, and seven turn around.

In recent years, it is indeed very spiritual.

In Wall Street, there is a sentence called Sell in May and go. Indeed, in May this year, A shares had a relatively large adjustment, many stocks fell more than 30%, and investors were losing money.

The main reason for this decline is that financial leveraging brings liquidity tension and investor panic.

Panic psychology I think is the main fact, in fact, this time the financial deleveraging is not aimed at the stock market, but for the property market, bond market and interbank market. However, due to the lack of confidence in A share investors and the relatively sensitive response of A shares, the financial leverage has a greater impact on A shares and a sharp decline in the A share market.

But I think

The impact on A shares is short and long, and in the short term, financial leverage seems to have affected some of them.

A shares may even be part of the fund because of the upgrading of regulation and withdrawal of A shares.

But in the long run, we can get rid of the chaos in some financial markets before we can guide more capital into A shares.

After all, A shares are a legal and compliant investment platform. Clearing up the phenomenon of arbitrary investment is conducive to the introduction of funds into A shares. In addition, the A share market has fallen to the bottom after two years of decline and has the value of the bottom.

Another logic is that the main purpose of financial deleveraging is to prevent further expansion of the financial bubble, prevent systemic risk and guide the flow of funds to the real economy.

From this logic, financial deleveraging is conducive to boosting the growth of the real economy and improving the performance of listed companies, which is fundamentally conducive to the long-term strengthening of the A share market. Therefore, I put forward a view that the impact of financial leverage on the A share market is short and long.

Let's talk about the issue of bond exchanges. According to the latest news, bonds will only be opened in the early stage, and will be opened to the south in the future.

I think this is a long-term consideration.

Because we know that the bond market has begun to adjust since the end of last year, and has experienced a big drop last year and an adjustment in this period.

In August last year, Qianhai's open source investment and research team judged that considering the Fed's interest rate increase, the central bank had to maintain the stability of the RMB exchange rate and had to change the policy of constantly lowering interest rates, which could turn to a small increase in interest rates.

This will create interest rate inflection point, from the previous interest rate cut to interest rate increase, interest rate inflection point often means the inflection point of the bond, so in August last year, we judged that the bond market may have an inflection point, it is possible to turn from the cattle to bear, so we then reduced the majority of the interest rate bonds and credit bonds held by the fund into bank agreement deposits, and last year, double 11 and double 12, at that time, the bond market actually fell sharply, and the five year treasury bonds were once down, and the turning point of the bull market in the debt market has occurred.

As for the bond market this year, I made it clear at the beginning of this year that the bond market was adjusted this year, at least two rounds of adjustment.

Now, the second round of adjustment of the bond market has begun. In recent years, the bond market has seen a relatively large fall, and the yield of treasury bonds has increased rapidly.

At this time, the opening of the North link of the bonds will allow Hong Kong and foreign investors to buy domestic bonds in Hongkong, which is helpful to ease the credit risk and lack of confidence in the domestic bond market.

Considering that the deleveraging of the debt market as a whole has just begun, the adjustment of the bond market is still a big trend, so the opening of the North pass has not fundamentally reversed the pattern of debt market adjustment.

However, the opening of north direction has played a positive role in easing the fall in the bond market and stabilizing market confidence.

From a large perspective, the opening of the north to promote the domestic bond market situation, and to move closer to the mature market.

The development of domestic bond market is not long and the scale is not large. Now many trading systems are imperfect, and there are many problems in the market. How to break the rigid payment and how to combat some false information disclosure is a problem that needs to be solved urgently in the domestic bond market.

The opening of bonds is conducive to the domestic bond market to learn from the international mature bond market and promote the development of domestic bond market. Therefore, I think the significance of the medium and long term opening of bonds is more important, and the opening of Shanghai and Hong Kong stock markets and the opening of Shenzhen and Hong Kong can be compared in a similar way. This is the view of bond exchanges.

Back to the A-share market, after this round of decline, the Shanghai stock index returned to the 3100 point. From the shock interval of the past year, the Shanghai Composite Index's shock interval is from 3100 to 3300, and now it is back to the lower edge of the interval shock, and the market has the power to generate anti A.

Judging from the performance of this market, some blue chips, which are highly recommended in the previous conference call, are comprehensive. Even some blue chips are on the rise. Some people have joked that ICBC has fallen a new high in this round of decline, and Moutai has also dropped to a new high.

It can be seen that the recent phenomenon of tug of heating is still very serious. During the turmoil, we dare not buy small cap stocks or bad stocks and get together to buy some blue chips and white horse stocks, which will create a new high price for white horse stocks.

The appearance of this phenomenon is also a normal phenomenon after the stock market crash.

I put forward an idea at the beginning of last year.

The performance will be king. Only the high quality stocks with outstanding performance are worth configuring, the funds will surge in large quantities, and some small cap stocks and subject stocks will be under the pressure of constant compression of valuations, and they may fall and fall.

Judging from the market operation in the past year, the market trend has verified my previous view. The 28 division is very serious. 20% of the high-quality blue chips have rebounded, and even the stock price has reached a new high, and 80% of the underperforming shares and small cap stocks have reached new lows, and valuations have been continuously compressed.

Now we are concerned about when this beautiful 50 market will come to an end and when the small cap stocks will seize the opportunity of consolidation. I don't think the time has come yet. When the time comes, it will take a look at the situation of the market operation, because the whole A share market has not changed. The market has not yet formed a unilateral upward trend. In the shock market, performance has become an important criterion for measuring the share price of the listed company.

So we don't need to guess when the market differentiation can be changed. Before the trend has been reversed, we must firmly dig out some blue chip stocks, and I think there is no need to catch up with some blue chip stocks whose share price has reached a new high. But we can dig some of them, and the stock price is still not high, and some second tier blue chips with better performance will probably have a good chance.

For the A share market, I think it should be the time to overcome fear and increase patience. At the bottom of the market is often a test of investor patience, there will be a serious lack of confidence.

In the A share has shown the bottom characteristics, already has foreign capital began to gradually pooling, and pensions and other cost funds are constantly entering, so the A share market can not be depressed for a long time, maybe in the second half of the year, the A share market may have a relatively decent rebound, the so-called five poor, six, seven turn over, now the market has fallen to the bottom, in the second half of this year may usher in a wave of relatively good rebound, we can wait and see.

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