Dispute on the reasonableness of the valuation the market has been accompanied by the growth process, the most representative arguments twice, once in 2001 and once in June 2007, .2001 level of stock market valuation reached an unprecedented height , the two cities more than 60 times the average price-earnings ratio, so there Jinglian the point theory stock market valuations are too high, there is a bubble; but there are a lot of people think that the high valuations of Chinese stocks is reasonable grounds that the level of economic growth in China is much higher than other major developed countries in the world.
by In my view, that the high valuation of the reasons China's stock market is not established. from historical experience, the high valuation of the stock market in 2001, the result of a bubble burst, the Shanghai Composite Index fell 998 points from 2245 points, and miserable in the stock market During the fall of China's rapid economic development, is rare in the Chinese economy with low prices and high growth period. shows that the stock market from the historical experience of rapid economic growth can not maintain the high valuation of the stock market. Thus, from the historical experiences , rapid economic growth and business performance, and no causal link between the relationship.
back to the time if the year 2000, the then market price of the Fund have appeared in a heated debate, and the current price on the stock has a very similar argument .1998 ago my funds are small, and they are all closed-end fund, the largest size of only 5 million, small only 2,000 million. During this period, the Fund market pricing of its net assets has been more than 2 times, when the highest bid price is about 5 times the net assets. However, since 1998, closed-end funds has expanded rapidly and the scale of the newly established fund of 20 billion yuan in . began to appear in the new fund, the market price or the continuation of its previous approach, the first Kaiyuan, Kim Tae prices have been the two funds at 2 yuan, is the net value of more than 2 times. But with the new funds established The rapid expansion of the scale, the Fund began to adjust the pricing, the rapid appearance when open-end funds, the closed-end fund premium pricing changes dramatically from the previous large discounts. closed-end funds trading price no longer exceeds its net assets.
concern is, why is the pricing of closed-end fund premium changes dramatically from the previous large discounts? 2000 years ago, the premium may be many reasons (probably and the current share price of all listed similar reasons for the high premiums), but closed-end funds after 2000 gradually changed from a premium discount is only one reason for that is rapidly expanding the size of the fund, the total size of several billion yuan from 2000 years ago, rapidly increased to several hundred billion dollars. When the fund size rapidly After expansion, the former > In the evolution of pricing the Fund, we can come to this revelation: A share of high premiums for various reasons may be because the rapid expansion of the number of stocks in circulation and no longer valid!
the health of the market during the first half of this year show that the growth rate of stock market capitalization as lifting of the ban and restricted shares have begun to affect the rapid expansion of the stock market valuation and Pricing .2005 August's stock market value of the proportion of GDP accounted for only 20%, but two years later, in August 2007 stock market value was more than the total amount of GDP. In the meantime, the stock market capitalization and the ratio of savings deposits increased rapidly from 10% to 50%. When the stock market value of 1 trillion yuan in circulation, we have 10 trillion savings deposits, and when the stock market value of nearly 10 trillion, our savings is 18 trillion. This 18 trillion in savings deposits, 70% are not into the stock market, China's savings deposits can be converted into stock investment funds are very limited. Even in 2006, the 2007 bull market atmosphere, the maximum size of savings into the stock market was only the additional savings the equivalent of current number of around 2 trillion yuan each year. However, in 2006 years later, the growth in market capitalization of the stock market much larger than the scale of savings can be mobilized in the past two years, the stock market capitalization increased by 6 trillion yuan, an annual increase of about 3 trillion yuan. more critical is that market capitalization growth is irreversible, as the the new market capitalization have more than 5 trillion yuan (calculated in accordance with the current share price), if the number of shares issued with the new, larger.
state in a bull market because investors blindly optimistic, the supply of funds the gap is ignored, but once the reversal of the bull market, the problem of insufficient liquidity quickly exposed. Recently the market for refinancing and the the performance of the financial carrying capacity.
the rapid expansion of the stock market will inevitably lead to capital reversal between supply and demand, the stock market crash stock in the case of ---- in a very short time a significant decline in the market panic and despair. The current market has a similar situation, but investors are still based on historical experience, that the Government would step in to rescue the market, especially with the Olympics before and after the Government would support the stock market strength, the Government's policy interventions have become the eyes of investors last hope. But history has proved and proved once again that the role of policy is very limited, and ultimately determine the market trend of the market rather than the government.
Maybe the current stock market valuation and pricing process is the 8-year fund repeat of the market.
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