In the past few days, the A** market has been turbulent, and investors are full of doubts. However, the China Securities Regulatory Commission (CSRC) made an emergency move over the weekend and issued a hotly debated notice, suggesting that it might be able to save the current A-share woes. But the question is, can a patch really resolve the market crisis?
There are two core contents of the CSRC's notice, the first is to completely suspend the lending business of restricted shares, which has an immediate effect and no buffer period. The second is to limit the efficiency of securities borrowing and lending, which will no longer take effect immediately as before, but can only be used the next day, and this adjustment will be implemented from March 18. The purpose of the notice is obvious, that is, to patch market loopholes and crack down on some speculative behavior, in order to stabilize the A** market.
With the passage of time, some criminals bypassed the lock-up period through various means, and seriously impacted the confidence of investors in a disguised way of cashing out. The CSRC hopes that through this adjustment, similar behavior will be prevented from happening again. In October last year, regulators revoked the lending privileges of special asset management plans for senior executives and core employees to participate in strategic placements, and achieved a drop of nearly 40%, proving the effectiveness of similar measures.
However, one might be overly optimistic that these patches will make a comeback. As a matter of fact, the problems of the domestic capital market cannot be solved overnight, and fundamental reform is needed.
Looking back on the background of the establishment of A-shares, the original intention of the first decade of the 20th century was completely different from that of the West, mainly for the purpose of pure financing, ignoring the investment function of the first century. However, the market situation has changed dramatically, and regulators are starting to set their sights on the investment market. Is such a shift possible?The answer is no. A few patches are not enough, at least a series of reforms are needed.
We can no longer adopt a trial-and-error attitude, take out a patch to test the market reaction, and it seems that as long as the stock index is a little bit, it can continue to follow the previous way. Such an act is very dangerous, like a blunt knife, and although it does not feel pain, it will cause great damage to the confidence of ordinary people in the long run. Once confidence has completely collapsed, it will be extremely difficult to recover.
Therefore, we should not stop at some emergency patches, but should bravely meet the greater challenge of reform. The problems of the capital market are all-encompassing and need to be fundamentally solved. If we continue to think the way we used to think, the problems in the market will get worse.
At this particular time, we need to be cautious and not only look at the current market volatility, but also pay attention to the health of the entire capital market. The CSRC's move is a small step, but we need bigger steps and deeper reforms to make A-shares truly achieve healthy development and achieve better investment results. Hopefully, in the days to come, we will be able to see the real rise of A-shares, rather than staying on the surface of patching.