Closing The A Share Market At Will Is The First And Final Success Of China'S Stock Market.

As we all know, "policy city" and "retail market" are the two deadly holes in the A share market.

There are not many options, only single election: the first level market is "de administration" and the two level market is "decentralized".

"Suspending IPO" and closing the A share first class market at will are the first and masterpiece of China's stock market, neither emulators nor successors. It is the only and wonderful thing in the world.

In December 19, 1990, the Chinese stock market was officially opened and the Shanghai Composite Index started at 100.

In April 13, 1992, the Shanghai composite index began to rise rapidly from around 390, and reached a record high of 1429 in May 1992. On the same day, the total turnover of Shanghai and Shenzhen two cities was only 511 million yuan. The first bull market of A shares ended on 30 trading days, and the market jumped 276%. In November 11, 1992, the Shanghai composite index returned to its original form and closed at 390 o'clock. On the same day, the total turnover of two cities in Shanghai and Shenzhen was 165 million 500 thousand yuan on the same day.

From 390 points to 1429 points and then back to 390, only 7 months to run a round of bull and bear cycles.

Then, a new round of mad cow attacked again.

From the 390 point in November 11, 1992, it began to pull up vigorously. It reached a record high of 1558 points in February 1993, and 1 billion 990 million yuan on the day. The second round of A shares took only 3 months. After that, a big bear market was launched. After a year and a half of A shares fell, in July 29, 1994, the Shanghai Composite Index hit the lowest point since February 18, 1992, 325 points in February 1993.

In July 30, 1994, the regulatory authorities promulgated the "three major rescue policies": suspension and issuance of new shares during the year; strictly controlling the size of the rights issue of listed companies; and expanding the scope of the capital market.

This is the first three and a half years after the A share market was established, and the first "rescue the market" mode and the "suspension IPO" mode.

This is the last resort under the background of "pocket total market value" and "super pocket tradable shares".

However, the "suspension of IPO" has been deeply labeled or branded as "bailout". Once it forms an inertial thinking and a dependent mentality, it will become unmanageable.

Since then, China's stock market has also fallen into the root of the "save the market" old disease and the "suspension of IPO": whenever the stock price falls sharply, shareholders will ask the government to "rescue the market" with one voice, coercion regulators to "suspend IPO", while regulators are often forced to give up, and form a vicious circle and market expectations of "IPO suspension" and "restart IPO".

In fact, in the short period of 20 years since the opening of China's stock market, our regulators have closed the first tier market of A shares for 9 times, and the total time taken to close the primary market has been 5 and a half years.

History has repeatedly proved that the suspension of IPO can not change the basic trend of the market. On the contrary, once the IPO is suspended, it will strengthen the bear market expectations, because investors have reached a high degree of consensus: only when they enter a bear market, will regulators suspend IPO.

Often, "suspend IPO" and shut down the primary market at will, it will inevitably bring about two consequences: first, the formation of IPO dammed lake, the number of enterprises waiting for IPO to pass through as many as more than 1000 companies, and the lack of hope in the long queue, which makes it difficult for IPO to approve thousands of gold, IPO is worth a hundred times; two is institutional arbitrage, overtaking corners, and many enterprises do not want to queue up. They go directly to the two level market to rush to buy the "shell" of the junk stocks, and reverse the takeover in disguised form of backdoor listing, which makes the junk shares worth hundreds of times, and borrow shells, buy shells, fry shells and bet A.

In the meantime, it also prevents junk stocks from being removed from the market with dignity and seriously distorts the function of resource allocation and survival of the fittest in the stock market.

The last time for A shares to close the primary market: from July 2015 to November 2015, this is the "suspension of IPO" after the 2015 stock market crash. It is also the shortest time to close the primary market. 4 months later, at the end of November 2015, the securities and Futures Commission "resumed IPO" in 2015.

In February 2016, Liu Shiyu took up the post of chairman of the China Securities Regulatory Commission.

In February 29th, after the second A bottom 2638 points, it began to bottom up, followed by 2800 points in the market.

At the same time, the SFC began to steadily and steadily push forward the preparatory work of registration system reform, further strengthening the construction of information disclosure system, and strictly investigating and cracking down on securities crimes.

Under the enclosure of the examination and approval system, the SFC gradually accelerated the pace of IPO, in response to the myth that the purchase of new shares was less than 1/10000, and the myth of the two or thirty trading boards on the new stock market. In order to solve the problem of IPO barrier lake, and to meet the huge demand of the new market, the pace of IPO approval was obviously accelerated. The rhythm of IPO was changed from one batch per month to half a month. Since July of last year, the number of new shares has increased, and since November last year, IPO has been speeding up to become a batch of every Monday, and has continued to date since March 2016.

This phenomenon is praised by the market as "IPO new normal", or IPO normalization.

At the end of 11 2016, the Shanghai Composite Index reached 3300 points.

President Liu Shiyu believes that the core function of the capital market is financing. "The stability of stock index and the strength of financing cannot be antagonistic".

This is the first time in the history of the SFC that the IPO rhythm has been cut and no longer tied up with the rise and fall of the stock index.

This is not a slogan, but a long march manifesto. It is a practical action of setting an example.

I believe that this speech has released a very important policy signal: first, the normalization of IPO means that the SFC will no longer suspend IPO because of market fluctuations, and will close the primary market at will.

Second, IPO rhythm normalization, the purpose is "bite teeth, ensure quality companies can be listed in time, in 2-3 years to solve IPO barrier lake."

Third,

Normalization can not only serve the real economy, but also effectively crack the shell game, so that the price of junk shares can return to the floor.

In fact, the normalization of IPO is not only to solve the problem of IPO barrier lake, but also to meet the huge demand of investors for new and new speculation. At the same time, it is also an inherent requirement of registration system reform.

Registration system reform is a major reform that the Central Committee has decided and the NPC has authorized.

The IPO registration system is the crystallization of the spirit of marketization, legalization and internationalization. Its essence is the "de administration" of the primary market, the reduction of the IPO market attributes, the downplay of the substantive judgment of the regulatory authorities on the value of IPO enterprises, and the strengthening of the mutual restraint between "sellers' responsibilities" and "buyers' conceit", so that the market players can take their responsibilities and make their respective responsibilities.

Concentrate on strengthening supervision and management of illegal and criminal activities in the market.

This is the whole meaning and real meaning of registration system.

The supervisory group headed by Chairman Liu Shiyu resisted the pressure of market noise and interest groups, did not shut down the primary market, did not suspend IPO, but moderately slowed down the pace of IPO.

I think this is an appropriate strategy.

We hope that the SFC will adhere to the general direction and unwavering market reform, and no longer close the A share market.

At present, the success rate of new stock purchase is still at 1/10000 lows, and even after the new IPO is listed, it needs to pull at least four or five more daily trading boards. In such a hot and huge demand for new and new speculation, some big V even keep their eyes open, and shout "anti IPO" anti market slogans.

I suggest that in the following two situations, we should consider moderation in slowing down the pace of IPO, but we must not shut down the primary market. First, if the success rate of new shares purchase from the current 1/10000 to 1% or 10%, we can consider slowing down the pace of IPO moderately; second, if the "break" situation occurs on the first day of IPO, we can consider slowing down the IPO rhythm moderately.

This recommendation is for reference by regulators.

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