The Fundamental Problem Of China'S Stock Market Lies In Its Institutional Defects.

The problem is that our market system is flawed. The stock market in China has always been short and bullish. It has experienced seven rounds of bull market since the beginning of December 1990 and the seven bear market in the early June 2015. All of them have gone up and down sharply, giving us the deepest impression of 2007's skyrocketing and 2008 slump, and the first half of this year and the beginning of the fall in mid June. What's the lowest point in history? Do you know? The lowest point in China's history is 324 points, more than 300 in 1994, the average bull market in China is 12.1 months, the bear market is on average 27.8 months, and the bear market is 2.3 times the duration of the bull market. The fundamental problem of China's stock market is the most essential.

In the bull market, the Shanghai Composite Index rose 217.2% on average, while the Shanghai Composite Index fell 56.4% on a bear market.

In contrast, the bear market in the US stock market lasted for 10 months on average, a decrease of 35.4%, and the bull market lasted 32 months on average, or 106.9%, and the bull market lasted 3.2 times as long as the bear market.

What is the root cause? In addition to the impact of the domestic and international situation, it is actually a system defect of China's capital market. It is an imperfect market and a market with a system defect.

How to solve the problem of stock market? Deepening reform and strengthening system construction is the fundamental way to revitalize China's capital market. General Secretary Xi Jinping recently held the eleventh meeting of the central financial and economic leading group. He stressed the need to guard against and defuse financial risks and accelerate the formation of a stock market with complete financing functions, solid foundation system, effective market supervision and full protection of investors' rights and interests.

Recently, General Secretary Xi repeatedly referred to the capital market, and raised the issue of capital market several times on different occasions.

So we have just talked about the strong rescue measures after the collapse of the current round. I personally believe that many of these "rescue" measures have not had the desired effect. No matter how the stocks are, cleaning up off court funds and combating insider trading are all right.

So I have summed up the shortcomings of so many of you.

One is that China's capital market has some problems at the beginning.

What's the problem? We all know that there was a slogan in the past called "developing the securities market and serving the reform of state-owned enterprises". This is why there are big slogans and why we need to develop. At that time, it was very difficult for us in 80s. When we said that loans could not be borrowed, we found that the stock market was useful. So the central leadership went to Shenzhen and said, "stocks are good things." in the case of Shenzhen Special Administrative Region newspaper, which newspaper is so big, "stock is a good thing". Why? Borrowing money is not enough, loans are still paid, and the issue of shares is self financing, so it begins to finance state-owned enterprises.

And then make it into a financing market, that is, we will be able to integrate capital, and do not need to repay it.

Why do people invest? What's the difference between the two level market? The price difference between the two markets is not enough for the ordinary people to buy and lose. So the Chinese investors are very poor and support the construction of the country. But the old quilt is like this. Why? The whole market positioning becomes a financing market. In fact, the capital market is a fund-raising market and an investment market. I am an investor. I want to get a return, and it is a long-term investment. This is called the investment market. This position is wrong at the very beginning. It is for financing the market for the reform and development of state-owned enterprises.

The second is

Up to now, there are still many problems. What is the problem with the issuing system? In fact, it is issued at a high price. There is a big difference between the primary market and the two tier market. Whoever can get the shares in the primary market can earn money. It is a risk-free market. But who can get it? Only the big family, only the machine structure, because the winning rate is very low.

The result is that it has been put on a daily limit for you. This year, the stock issue is the most popular one, because it can start up at the first day of listing. It is the highest limit. It is the highest limit from second days, and it can rise 10% or up to more than 50 daily. It can't be bought from tens of dollars to four hundred. At this time, it has been released. Good luck. Two people in two securities companies, you buy me, sell them, you sell them, I buy them and carry them up, and at the beginning, the whole red line can not be bought. When it is released, it has made gold and silver full bowl, run, sell it to you, and you buy the second days fall off. With reform, this restriction is issued, and the price limit should not exceed two level market circulation rate, 25 times or 35 times, which should be low.

Recently, I know one thing. China's nuclear power, three yuan 39 Fen, is very low. The result has been rising from the first day, rising to 12 yuan. It has increased several times, three times more, and 12 blocks have been released. The common people see 12 pieces also worth buying, and not high.

Second days down to 11, third days to 9 yuan, when did the people buy it? 12 yuan, not three 39 Fen, how does this system protect investors, how to protect small and medium-sized investors, not to protect large investors, and protect those institutional investors? So many of China's wealth is not issued in the two market, are issued in the primary market, the system does not change how to do it?

The third company system has problems, the corporate governance structure is not perfect, and there is no standardized dividend system. Some companies have not paid dividends for ten years.

Fourth insider trading in China's capital market,

Securities fraud is very serious, which is more serious than in the United States.

The so-called stock crash, you see too much manipulation of the market, insider trading, including through the "rescue market" insider trading, this behavior is too much.

The fifth Chinese capital market is still a speculative market and a hype market.

We do not invest in the market. What we call investment refers to long-term investment. When I enter a stock, I will be a shareholder of it. The main reward I get is internal return. China does not.

There is a joke in China. Do you know that this guy is really unable to stock up and become a shareholder? He has no skills. He has hit you in his hands and waited. After waiting for two days, the company is finished, so it's better to run now.

As a matter of fact, in the European stock market is underdeveloped, the US stock market is very developed, the US stock market is developed, the United States all entrustment investment, the retail investor has very little direct investment, he entrustment the fund to entrust the investment, China is self fry, the retail investor, all is his fry.

In Europe and Germany, however, its two level market is very underdeveloped, but they all share their shares. Why? There is a substantial dividend every year. Is that ok? In the old China, there is a red trend.

Then

That is, retail investors account for about 80% of the stock market volume, and this proportion reached 90% in the first half of this year. It is not that they can not be fired. There is no advantage in retail funds. There is no advantage in technology. There is no advantage in time. They are not professionals. They are professionals. You say I go to stocks, and some say that Mr. Cao has been talking about stocks all the time. Do you buy stocks? I say I do not stir fry. I can not go to class to say that comrades have gone to the toilet. When I saw the plate, I just went down and could not sell.

Retail investors actually have no advantages. Why do I say that you buy funds and buy money to help you do that? Of course, Chinese institutional investors do not make profits for you, so Chinese investors are very bitter. How does the fund company earn, not to make profits well, but to look at scale management fees. As long as there is scale, I don't care whether you earn or not, I have management fees, this is China.

Therefore, it is not for him to do well in profits. What is the net profit below dividends when dividends are made? Profit 90% must be allocated to fund holders. This is a law requirement, but they have not been allocated to you for net value, so there is no way to do it, or you deliberately lose the net value.

China's stock market has a high turnover rate, the number one in the world. According to statistics, the annual turnover rate of China's stock market is nearly 8 times. What does it mean? 8 times a year, if it changes to T+0, there will be a lot of fees and more stamp duty every day.

Even if T+0 can't make money, the average holding period is 32.7 days on the basis of 260 trading days in the whole year, while the United States is 0.97 times, Japan is 1.4 times, Korea is 1.05 times, Hongkong is 0.97 times, Taiwan is 1.27 times, and people are changing their stock once a year, so we always change the old market there, so this situation is easy to rise and fall. Instability is a typical speculative market, not the investment market, and the investment market is a long-term holding. This is caused by institutional problems.