In the ** trading on February 5, although the market volatility continued, two unusual phenomena appeared, which may indicate a new strategy of state intervention in the market. First, the regulator made a rare statement on the issue of staking during its lunch break, noting that the market value of staking as a percentage of the total market value has increased from 1051% to 338%, and the balance of pledge financing also increased from 269 trillion yuan reduced to 159 trillion yuan. In addition, the regulator also proposed to encourage brokerages to increase the flexibility of the liquidation line to maintain market stability. The second phenomenon is that the trading volume of ETFs related to small and medium-sized enterprises has surged, especially the trading volume of CSI 500 ETF has exceeded 16 billion, which is 10 times that of usual. This suggests that the state may be backing non-state-controlled enterprises through ETFs.
On two fronts, the national team's bailout strategy seems to be shifting. On the one hand, large state-owned enterprises (e.g., Bank of China, PetroChina, China Mobile) are unlikely to be targeted by bears due to their strong market position and stable access to financing. These companies are usually not lent to securities lenders by major shareholders, and public offerings will not lend these easily. As a result, the ** of these companies is almost a one-way long market in the market, and the power of the bears is minimal.
On the other hand, SMEs play an important role in the economy, contributing a large amount of tax revenue, GDP, technological innovation, and jobs. However, these companies do not account for a high proportion of the market capitalization and are susceptible to market fluctuations. Recently, the CSI 500 and CSI 1000 indexes have caused many "snowball" products to trigger knock-in conditions, causing losses to investors. The issue of pledge of small and medium-sized enterprises has also attracted attention, because these enterprises often pledge their pledges because of their financing needs, and once the market is pledged, they may face the risk of forced liquidation.
In this case, the regulator's statement and the actions of the national team may be aimed at easing the market's panic about SMEs and stabilizing the market by supporting these businesses. This shift in strategy could mean that the state is devoting more resources to small and medium-sized enterprises (SMEs) to support these businesses, which contribute significantly to the economy.