Text |Wang Yuanlei.
On February 7, Wu Qing took over from Yi Huiman and served as the China Securities Regulatory CommissionTenth President, the China Securities Regulatory Commission officially "changed the commander".
This news is also seen as a big positive for **.
Since the beginning of this year, the trend has been extremely unusual, with A-shares continuing to fall, and the Shanghai Composite Index breaking through 2,700 points many times. On the morning of February 5, the three major A-share indexes hit a new low, with more than 5,000 stocks in Shanghai, Shenzhen and Beijing, of which nearly 3,500 shares fell by more than 9%. At noon on the same day, the falling limit exceeded 1,000, the 21st time in the history of A-shares".1,000 shares down limit"Staged.
On the same day, the Shanghai Composite Index was once **304%, hitting a low of 263509, hitting a new low for the year, market sentiment fell to the freezing point.
On the evening of February 5, the China Securities Regulatory Commission issued a document with quite harsh wording. In the "Severe Punishment of Manipulating the Market and Malicious Shorting and Effectively Maintaining the Stable Operation of the Market", the China Securities Regulatory Commission said that the manipulation of the market and malicious shorting, which seriously eroded the people's "money bags", has stood on the opposite side of all shareholders and disrupted the normal rhythm of healthy and stable operation.
The China Securities Regulatory Commission said that it would maintain a "zero tolerance" high-pressure posture and resolutely crack downLet those who dare to manipulate illegally and maliciously short sellers "go bankrupt and sit in prison".。In this warning, don't defy the law and take chestnuts from the fire.
On February 6, A-shares continued to rise after opening low, and on the same day, the three major stock indexes all turned red, and the Shanghai Composite Index rose 323%, the ChiNext Index and the Shenzhen Stock Exchange Component Index both rose more than 6%.
On February 7, the full-day trading volume of the market exceeded 1 trillion yuan for the first time since late November last year, and the major indices strengthened again.
For the market trend since January this year, some people believe that although the Shanghai Composite Index has not fallen below 2,600 points, in fact, a large number of small and medium-cap stocks have been cut in half, and the long-pent-up market sentiment broke out in January, only to appear a tragic situation of 1,000 shares falling to the limit.
Of course, there are different points of view. However, in terms of opening, there is a general consensus that there will be a wave of ferocious "clearing" before the market reopens.
So, has A-shares, which have been declining for three years, fallen to the bottom? Is the more than a month-long sharp ** the last fall? What is the root cause of this crash? When it may be turned on***
01 "1,000 shares fall limit".
In the first month of 2024, A-shares soared**, and the Shanghai Composite Index fell below 2,700 points from nearly 3,000 points several times, and market sentiment fell to the freezing point.
January 2 was the first trading day of the year, and as of **, the Shanghai Composite Index was 296228 o'clock. Since then, in more than a month, ** has gone down, breaking through 2700 points many times.
During this period, starting from January 18, intraday reversals were staged several times**. From that day to January 24, the **ETF trading volume reached 470.8 billion yuan during the week, with a net inflow of 104.4 billion yuan. Among them, 4 CSI 300 ETFs and 1 SSE 50 ETF received large amounts of capital holdings, with a total net inflow of 103.4 billion yuan.
On January 24, the Shanghai Composite Index regained 2,800 points under the joint efforts of multiple departments to stabilize market expectations.
However, the situation has not been reversed, on February 5,A-shares staged a scene of "1,000 shares falling to the limit".At the opening of the day, the three major indexes hit new lows, and the Shanghai Composite Index once touched 263509 o'clock, as of ** is 270219 o'clock.
On this day, there were more than 5,000 stocks in Shanghai, Shenzhen and Beijing, of which nearly 3,500 fell by more than 9%. At noon on the same day, more than 1,000 fell to the limit.
In fact, the past 1 month has not only been more than this month, but the timeline has been extended, and in the past three years, A-shares have been falling in the **, which can be described as a long time.
Shanghai Composite Index on February 18, 2021It hit a stage high of 373169 pointsFrom this time on, A-shares have opened *** If you look at it from that time, as of February 5 this year, the Shanghai Composite Index has been about 29%, the Shenzhen Component Index has been about 45%, and the ChiNext Index is about 50%.
Under the downward trend of the **index**, a large number of **market capitalization has been cut in half, and the stock price has continued to hit new lows.
It is worth noting that the China Securities Regulatory Commission, the central bank and other departments have been working together to stabilize market expectations. On February 6, the China Securities Regulatory Commission held a symposium, emphasizing that listed companies should earnestly assume the main responsibility of enhancing their own investment value, take the initiative to improve investor returns, actively maintain market stability, and work together to boost investor confidence.
On the same day, ** Huijin issued a document saying that it fully recognizes the current A** market allocation value, has recently expanded the scope of ETF holdings, and will continue to increase its holdings, expand the scale of holdings, and resolutely maintain the smooth operation of the capital market.
Real estate, consumption, and the private economy are important aspects that affect the trend of A-shares. According to incomplete statistics, since the issuance of the "Notice on Several Measures to Promote Household Consumption" on July 18, 2022, the China Securities Regulatory Commission, the Central Bank, the state and other relevant departmentsMore than 110 packages of policies have been issued to promote real estate, consumption, and the development of the private economyto activate the capital market.
But the actual trend is not optimistic, the policy has been exerting force, A-shares do not buy it, and the **index continues to fall in **. Looking at the world, in 2023, A-shares will still rank low in terms of growth rate among major indexes, and the Shanghai Composite Index will be **370%, SZSE Component Index for the whole year**1354%。
In comparison, the NASDAQ has a full year of **4342%, Nikkei 225 full year**2824%, Dow Jones Industrial Average for the full year**1370%, India's NIFTY50 **2003%。
If there is no support from heavyweight stocks, the Shanghai Composite Index has already fallen below 2,600 points, and it may be significantly **! On the social ** platform, a large number of investors commented.
On the one hand, the policy continues to release good news, and on the other hand, the **index is falling in **, so what is the root cause of the A-share trend falling short of expectations? What's the problem?
02 What is the root cause?
In the first month of 2024, the overall performance of A-shares was far less than expected, which was caused by a combination of internal and external factors.
Weakened liquidity is the first "killer" affecting A-shares**. Previously, under the influence of the US dollar interest rate hike cycle, global capital poured into the United States, a large number of investors increased their investment in the US market, and the outflow of foreign capital from A-shares caused by the weakening of liquidity.
Domestic investors have also not invested in **, and most of the "live money" issued by the central bank has been digested by real estateLack of incremental fundingThis liquidity shortage has a circular effect, with declining investor confidence and less and less incremental funds in the market.
This is also the background of the times under today's new development pattern. The three-year epidemic has had a huge impact on the world, and since the end of the overall epidemic prevention and control, China has ensured the development of people's livelihood and has not developed the economy through large-scale strong stimulus measures, and the price pressure is small.
It should be noted that the epidemic has caused great pressure on small, medium and micro enterprises in various fields, and many enterprises have broken capital chains, product backlogs, and customer losses, which has a direct impact on the increase in enterprise closures, the reduction of jobs, and the decrease in employee income, which is reflected in investmentInvestor confidence is low, unwilling or afraid to put money into the market again.
It is also a risk-resistant preparation for the challenges of the future.
The data also proves that, according to the statistics released by the central bank, as of the end of December 2023, the balance of RMB deposits was 28426 trillion yuan, a year-on-year increase of 10%. Among them, household deposits increased by 1667 trillion yuan, and deposits of non-financial enterprises increased by 422 trillion yuan, fiscal deposits increased by 792.4 billion yuan, and deposits of non-banking financial institutions increased by 164 trillion yuan.
It can be seen that savings deposits are still increasing, and in the face of various uncertainties in the future, people are more willing to deposit funds in banks to "eat interest" and take risks for those who are unwilling to invest in the capital market.
The real estate market is sluggishIt has become an important reason for dragging down economic development and affecting people's confidence. Real estate has never been an ordinary industry, but a basic area related to the national economy and people's livelihood, the scale of the upstream and downstream industrial chain of real estate accounts for as much as 20% of the national economy, and the fluctuations of the real estate market can be said to affect the whole body.
In the past ten years, the rapid development of the real estate industry, some real estate companies in order to pursue scale and market share, blind expansion, excessive use of leverage, resulting in high debt, high inventory and other problems, can be said to have been on the edge of the capital chain break, now the market is weakening, all kinds of problems are immediately exposed.
At the end of 2016, the first economic work conference for the first time put forward the "housing not speculation", in March 2017, the most stringent "purchase restriction order" in history was rolled out across the country, and from 2020 onwards, strict control measures have been implemented, the income and profits of real estate enterprises have declined sharply, the difficulty and cost of financing have increased significantly, and the real estate industry has quickly entered a cold winter.
A number of well-known real estate companies have a financial crisis, the thunderstorm situation can be said to be more and more intense, and the high debt of trillions of dollars is simply appalling, which also directly leads to a sharp decline in the sales volume of commercial housing, and the prosperity of thousands of industries linked to real estate continues to decline.
At the peak of 2021, the sales area of commercial housing in the country was nearly 1.8 billion square meters, and by 2023, it has dropped to about 1.1 billion square meters, which has greatly dragged down the growth of consumption and investment and become a major challenge hindering economic development.
It is a barometer of the economyThis is a famous quote by Charles Henry Dow, the founder of Dow Theory, although A-shares have excessive speculative properties, but the timeline is extended, this sentence is also applicable.
Of course, in addition to economic factors, there are still various problems in A-shares themselves," said the A-share marketHeavy financing, light investmentThis has been widely criticized. In November 2018, the Shanghai Stock Exchange set up the Science and Technology Innovation Board and piloted the registration-based system, and in February last year, the registration-based system began to be fully implemented, and more than 1,900 companies have been listed for the first time in the past five years, raising about 221 trillion yuan, under the rapid expansion, market liquidity is under pressure.
At present, the number of A-share listed companies has reached 5,311 (as of February 17, 2024), and the number of A-share listed companies has caught up with the United States with reference to the United States.
In addition,A-shares are also under pressure from major shareholders**According to wind data, during the pilot period of the registration-based system from 2019 to 2023, the market value of the number of restricted shares released is about 2298 trillion yuan, the scale of lifting the ban has nearly doubled compared with the previous five years.
In response to the issue of major shareholders, the China Securities Regulatory Commission has also issued a document. However, the excessive concentration of major shareholders' shareholdings is still a common situation in listed companies, which fundamentally creates space for major shareholders.
It should be an investment market and an important participant, which directly affects the liquidity of the market. However, in recent years, quantitative trading has taken advantage of the advantages of information and trading that it does not have, drawing blood from A-shares and reducing the dimension to "harvest" ordinary investors.
Ren Zeping, a well-known economist, once wrote that the introduction of quantitative trading in China is to enhance liquidity, but nowQuantitative trading has been reduced to a large "sickle"., which has caused serious damage to the A-share ecology, and the market liquidity has not only not increased but further weakened.
A number of investors also said that quantitative trading has indeed increased the difficulty of investment, and the probability of ordinary investors being "cut" has increased significantly. Therefore, at the regulatory level, it is still necessary for relevant departments to make efforts to solve it.
It is worth noting that in the past two years, high dividend stocks on the A** market have been sought after, which can also be seen as a reflection of the risk aversion of the majority of investors. So, how to activate the capital market?
The most fundamental thing is to develop the real economyThe speculative nature of A-shares has been widely criticized, but as a barometer of the economy, economic recovery has a huge pull to boost investor confidence.
03 Faith is key
Under the combination of various factors, the trend of A-shares in the first month of the year was amazing, and the Shanghai Composite Index fell to 2635At 09 o'clock, there was a situation of "1,000 shares falling to the limit", so how should the market be saved?What is the key to save?
In fact, as mentioned earlier, this year,Multiple departments are already working together to stabilize market expectations。On January 22, the National Standing Committee listened to the report on the operation of the capital market and work considerations, emphasizing that "more effective measures should be taken to stabilize the market and stabilize confidence".
Following the emphasis of the National Standing Committee, the State-owned Assets Supervision and Administration Commission, the State Administration of Finance, the China Securities Regulatory Commission, the Central Bank and other departments have taken action. On January 24, the State-owned Assets Supervision and Administration Commission emphasized that central enterprises should strengthen market value management and attach importance to increasing holdings, repurchases and dividends. Subsequently, the relevant person in charge of the China Securities Regulatory Commission made it clear for the first time that it was necessary to build an "investor-oriented capital market".
In the afternoon of the same day, the central bank announced a RRR cut, and on February 5, the reserve requirement ratio was lowered by 05 percentage points, providing long-term liquidity to the market by 1 trillion yuan.
On January 25, the State Administration of Financial Supervision and Administration said that it had recently introduced more than 50 measures to open up the financial sector to the outside world, including the abolition of restrictions on the proportion of foreign shares in banking and insurance institutions, and the abolition of restrictions on the proportion of foreign equity in financial institutions that can participate in shares, acquire and increase capital.
On February 4, the China Securities Regulatory Commission said that it would listen to investors' voices, respond to investors' concerns in a timely manner, stabilize expectations and confidence, prevent abnormal market fluctuations, and investigate clues of violations of laws and regulations.
However, these statements failed to reverse the trend of A-shares, and on February 5, A-shares fell sharply, with the three major indexes hitting new lows, and the Shanghai Composite Index once fell to 2635At 09 o'clock, there were more than 5,000 stocks in Shanghai, Shenzhen and Beijing, and thousands of them appeared to fall to the limit.
That night, the China Securities Regulatory Commission issued a document again, the wording was extremely harsh, and the China Securities Regulatory Commission said that manipulating the market to maliciously short-sell, seriously eroding the people's "money bags", has stood on the opposite side of all shareholders, disrupting the normal rhythm of healthy and stable operation.
The China Securities Regulatory Commission further stated that it will maintain a "zero tolerance" high-pressure posture and resolutely crack downLet those who dare to manipulate illegally and maliciously short sellers "go bankrupt and sit in prison".
In addition to the documents and statements issued by multiple departments, at the capital level, many shares of funds enter the market through ETFs. Through the recent market trend, it is not difficult to find that in the case of the net outflow of northbound funds, A-shares are still **, and the important reason is that the "national team" has protected the SSE 50 ETF and the CSI 300 ETF, superimposed policy stimulus, thus promoting the **index**.
So, how much does this kind of action really play to stabilize market confidence?To answer this question, it is still necessary to analyze the market trend. Judging from the trading situation in the past week, although the Shanghai Composite Index has shown signs of **, the small and medium-sized caps are still on the "horizon", mainly because the heavyweight stocks have played a supporting role in the ** index.
For most ordinary investors,"Buy at 2700 points, lose at 3000 pointsIt seems to be a joke, but it actually happens from time to time.
In other words, under special conditions, there is a certain distortion in the ** index, although the index is on the rise, ordinary investors are still losing money, which cannot directly and effectively boost investor confidence.
Some investors said that the crux of the current market is the lack of incremental funds, and it is still a game between existing funds, which is very unfavorable to ordinary investors. That is to say,Funding is a key to solving the puzzle temporarily
It is worth noting that during the author's investigation, it was found that most enterprises are currently in a state of lack of money, and there is general financial pressure, not only for institutions, but also for individual investors. As a direct result, there will not be a large amount of incremental money entering the market.
As of the end of 2022, the central bank's statistics show that China's RMB deposit balance is 2585 trillion yuan, a year-on-year increase of 113%。Renminbi deposits increased by 26 for the year26 trillion yuan, an increase of 6 percent year-on-year59 trillion yuan. Among them, household deposits increased by 1784 trillion yuan.
By the end of 2023, the balance of RMB deposits in China will be 28426 trillion yuan, a year-on-year increase of 10%. Renminbi deposits increased by 25 for the year74 trillion yuan, of which household deposits increased by 1667 trillion yuan.
It can be seen that judging from the savings deposit data, it seems that the market is not short of money. But is that really the case? In fact, according to public survey data, these deposit fundsHigh concentration of minoritiesMost residents still have small deposits.
On the one hand, it is difficult to have a large amount of incremental capital entering the market, which does not have a large effect on the active market; Second, the higher the savings deposit, the stronger the residents' risk aversion and the greater their worries about future uncertainty.
Behind the continued rise in savings deposits is actually a matter of confidence
In the past five years, the economic development environment at home and abroad has changed abruptly, a large number of small and medium-sized enterprises are facing difficulties, and some industries are still in the recovery period, which has greatly affected the job market.
Employment is the greatest livelihood of the people and the basic support for economic developmentAlthough the number of new urban jobs across the country continues to grow and the scale of employment expands steadily, the external environment is complex and severe, the domestic economy is still facing downward pressure, and the employment situation is still under pressure.
In such a situation, investors will inevitably be worried about the future. Compared with mature markets, A-shares also have some institutional loopholes, including "heavy financing, light investment", the rapid development of the number of IPOs of listed companies, and the frequent occurrence of major shareholders, which has a great impact on investor confidence.
To activate the capital market, it is necessary to reduce the fear of not daring to invest and unwilling to investIt is necessary to regard institutional construction as a long-term important task and increase the entry of medium- and long-term funds into the market, to play a role in the market to support the bottom of the pull,Increase the liquidity of the marketto really boost investor confidence.
* is the barometer of the economy", in the long run, China's economic stability and improvement trend has not changed, which provides the basic conditions for the development of A-shares.
The "Buffett Indicator" is widely known, calculated according to the "Buffett Indicator" formula, and the U.S. GDP is about 2547 trillion US dollars, the total market capitalization of US stocks is 44 trillion US dollars, and the ratio is about 173%. China's GDP is 120 trillion yuan, and the total market value of A-shares is 877 trillion yuan, the ratio is about 73%.
In contrast, there is still a lot of room for growth in A-shares, and most of the incremental scale will be obtained by investors participating in the market. Therefore, in the long run, with the continuous improvement of the system and the recovery and development of the economy, investors should improve their confidence.
04 Has it hit the bottom?
In the face of the rapid development in January this year, a question is, has the current A-share market "fallen through" and has it reached the bottom?
To answer this question, we must first define what a "bottom" is.
In "How is the historical bottom of A-shares refined? In the article, the China Merchants ** strategy team took the Wind All-A Index as a reference, and called the inflection point of the early decline of more than 20% and the later increase of more than 30% as the "historical bottom". Judging from this, since 2005, A-shares have appeared in total7 historical bottoms
In other words, if there is a significant increase in 7 historical bottoms**, there will be a relatively significant gain in the coming period.
By combing through the causes and trends of many bull and bear markets in the past, except for a few special circumstances, it can be seen that economic prosperity is the basis for the emergence of a bull market, and an economic recession indicates the coming of a bear market.
But the problem is that if investors rely on changes in economic prosperity to judge whether they are at an inflection point, it is not easy, especially for ordinary investors in A-shares who are at a disadvantage in terms of information and resourcesThere is almost no chance of winning if you want to grasp the inflection point
It is worth mentioning that there is also a certain time lag between ** and economic fundamentals, coupled with the fact that the policy has a stimulating effect on the market, so it depends on whether A-shares are at the bottom of history, at least from three dimensions, namelyThe bottom of the policy, the bottom of the market, the bottom of the economy
It is important to note that these three "bottoms" do not occur at the same time, and there will also be a time difference. Moreover, these three so-called bottoms cannot be intuitively presented, the so-called "policy bottom", what kind of policy means "bottoming"? The so-called "market bottom", what kind of market will appear "market bottom"?
If you can't go straight out, it's hard to tell if you've entered the bottom.
Between these three, an exceptionally key indicator, social finance, plays an important role. As an important supplementary form of financing for economic entities, social finance makes up for the shortcomings of a single bank's narrow financing channels and the shortage of funds.
Compared with the amount of new loans, social finance is a broader statistical indicator of money circulation, in addition to the new loans of financial institutions, social finance data statistics also extend to channels such as ** and bond marketIt can reflect the supply and demand of socio-economic funds relatively more realistically
Combing through the past many "historical bottoms", it is not difficult to find that in order to judge the real bottom of A-shares, in addition to relatively strong policy signals,The growth rate of high social finance should appear first
Of course, today is different from the past, and the development environment at home and abroad has also undergone earth-shaking changes, and past data can only be used as a reference. However, it is certain that the accelerated improvement in the growth rate of new social financing means that the real economy will receive more financing, and the corresponding investment and consumption demand will also increase, and the income and profitability of enterprises will also improve.
From this point of view, social finance is indeed an important indicator for judging the economic situation and the best trend, so what is the current performance of social finance?
In the report "4 Major Concerns - 2023 Social Finance Review and 2024 Outlook", Guosheng** team believes that the scale of credit and social finance will increase year-on-year in 2023, but the year-on-year increase is mainly concentrated in the first quarter, which is consistent with the annual economic trend.
At the same time, the team believes that the structure is not good, which is mainly reflected in the small year-on-year increase in medium and long-term loans to residents for two consecutive years, the main pull of social finance, and the continuous decline in M1 growthThe core behind it is still a lack of demand and confidence, the process of easy money to easy credit transmission has been blocked.
In addition,Volume is also an important indicator to judge the trendAfter the opening of the market on February 7, the two markets were at a high level after the rapid increase in early trading, showing a general upward trend, and the turnover of the Shanghai and Shenzhen markets exceeded 1 trillion yuan, reaching 102 trillion yuan.
This is also the first time that the turnover has exceeded 1 trillion yuan this year, and the trend has continued throughout the day, and the market has obvious signs of recovery.
Of course, the market trend is changing rapidly, and it cannot be directly judged that A-shares have crossed the bottom and are about to open***
05 Write at the end
In the darkest moment of the market, world-class investment masters such as Warren Buffett and Munger have reference significance for their actions.
On October 19, 1987, the United States ** crashed, and the scale of evaporation in a single day accounted for 10% of the GDP of the United States that year, and Buffett lost 3$4.2 billion, Berkshire Hathaway's share price for the week**25.
In this case, Buffett did not choose to sell, but was unusually quiet as usual, Buffett is a real value investor, with his life in the practice of "being a friend of time", Buffett believes that "the market is meaningless, should focus on the company itself".
It was after *** that Buffett bought Coca-Cola the following year, and in the following decades, Coca-Cola made Buffett a lot of money.
There are great differences between the United States ** and A-shares, and the investment philosophy and investment logic of investors are also different, so whether it is the bottom, whether it is an inflection point, and when it will usher in *** The criteria for judging these issues are also different.
But at least from the current point of view,Investors still need to remain cautious and invest rationally.
After all, for ordinary investors, "if you don't get off the stage, you have a chance to win." (This article represents personal views only and does not constitute any investment advice).
References: 12023 Letter to Investors. Broad Assets.
2.It is recommended to regulate quantitative trading to prevent it from becoming a large sickle. Zeping macro.
3.4 Focuses: 2023 Social Finance Review and 2024 Outlook. Guosheng ** Research Institute.
4.A-share soaring: an unusual signal. Gelong.
5.How is the historical bottom of A-shares made? —A-share investment revelation (19).Research on investment promotion strategy.
6.Have A-shares fallen out? Yuanchuan Investment Review.
7.Wayfinding A shares. Financial.
8.A shares bottomed out, who is in the long and short showdown? The readings are unique.
9.How investment gurus get through the darkest moments. Zeping macro.
10.Social Finance vs Inflation: The market is confused. Gelonghui.
11.The starting point of the social finance and the new round of themes. A native dog in the sea.
12.Is the quantification of "everyone shouting and beating" and "everyone loves" so unbearable and bloodthirsty? Parity.
The author of this article is a senior author of Yiou, focusing on cutting-edge technology and primary and secondary markets).