news

author: senior brother, editor: xiao shimei

in the last week before national day, regulators sent a series of good news.

on september 24, the people's bank of china, the state administration of financial supervision, and the china securities regulatory commission collectively launched many major policies such as lowering reserve requirements, lowering interest rates, and reducing existing housing loans. they even involved the central bank's indirect entry into the market, which had never been done before. the intensity was rare in history.

on september 26, the top decision-makers held a meeting, emphasizing the need to vigorously guide medium and long-term funds into the market, open up the blocking points for social security, insurance, financial management and other funds to enter the market, and once again set the tone for efforts to boost the capital market.

a-shares are also booming. the shanghai and shenzhen indexes surged by more than 4% on september 24, the largest single-day increase in four years. it only took three days for the shanghai composite to go from below 2,800 points to regaining 3,000 points.

in fact, a-shares, which have been in the doldrums for three years, have always hidden the power of reversal. if you give a-shares some time, everything will be different.

[labor pain]

without the recent surge, the shanghai and shenzhen stock markets may have recorded three consecutive negative years for the first time in the past 30 years this year.

in stark contrast, this round of decline coincides with the prosperity cycle of the global capital market, and the global capital markets represented by u.s. stocks are frequently reaching new highs.

the decline of a-shares is due to economic and market cycle factors, as well as the impact of the federal reserve's interest rate hikes, but the ecology of the market itself is also an important reason for the downturn.

the most typical feature is that the market positioning that emphasized financing and neglected investment in the past has brought about the low quality of some listed companies, insufficient investor awareness of returns, and an imbalance in the supply and demand structure.

from 2021 to 2023, more than 1,200 companies will be listed on a-shares, setting a record high, while only 116 companies will delist, less than one-tenth of the number of ipos throughout the year. as of the end of 2023, the total number of a-share listed companies exceeds 5,300. against the background of the decline in the index, the total market value of a-shares is higher than in 2020, which shows the extent of market expansion.

the current sluggish performance has caused many people to lose their confidence. even in the eyes of some people, it seems to be an eternal fact that u.s. stocks will always rise and a-shares will always fall.

however, if we look at the differences between a shares and us stocks from a historical and development perspective, we will have a completely different perception.

the u.s. stock market is one of the most mature and oldest capital markets in the world. the dow jones industrial index was established in 1896. for a long time in the beginning, the dow was also bullish and bearish.

it is only in the past 40 years that the stock market has gradually become an important tool for boosting the economy and consumption in the united states. through policy changes such as strengthening supervision, continuing to introduce long-term investors, and strengthening stabilization funds, the ecology of the u.s. stock market has undergone tremendous changes, and has finally matured into a long-term bull. stage.

compared with u.s. stocks, a-shares, which have only a history of more than 30 years, are obviously far from maturity. bullishness, short-term growth, and bearishness are actually just inevitable pains in the development process of a-shares.

【changing situation】

when the mood is at its most pessimistic, people tend to ignore changes in the market.

in the past few years, regulators have been promoting reforms at the institutional level. the most important direction is to vigorously attract long-term funds from home and abroad, significantly increase the proportion of institutional investors, and change the structure of a-share investors from the demand side.

changes in investor structure are an important symbol of market maturity. an important sign that the market is maturing is that although a-shares have performed poorly in the past few years, the decline and volatility are much lower than in past rounds of adjustment cycles, and the stability of the market has been greatly improved.

on february 7 this year, the china securities regulatory commission changed its leadership. wu qing became the chairman of the china securities regulatory commission and was the first person at the helm with experience in performing duties in the securities regulatory system. wu qing's appointment means that the china securities regulatory commission has opened a new chapter in the appointment and dismissal of high-level personnel and the organizational model, and the supervision of the securities industry has also ushered in a more professional and market-oriented approach.

the most obvious change after wu qing took office wasthe main purpose is to improve the market ecology from the supply side, by significantly reducing the scale of ipos, standardizing and strictly restricting the reduction of major shareholders, and giving the market time to recuperate.

as of september 24, there were only 65 companies listed on the a-share market this year, raising a total of less than 50 billion yuan, less than one-third of the same period last year, while 51 companies were delisted, more than all of last year. there are even more.

at the same time, 136 listed companies have issued relevant announcements this year promising not to reduce their shareholdings, and the period of commitment not to reduce their shareholdings ranges from 6 months to 60 months. during the year, important shareholders of listed companies reduced their holdings by 14.497 billion yuan, a decrease of nearly 70% compared with the same period last year.

the quality improvement and investment value of listed companies have also been raised to unprecedented heights by regulators.

after the press conference of the state council information office on september 24, the china securities regulatory commission issued the "opinions on deepening the reform of the m&a and reorganization market of listed companies" and publicly solicited opinions on the "supervisory guidelines for listed companies no. 10 - market value management (draft for comments)" , expressing support for listed companies to use mergers, acquisitions, reorganizations,equity incentives, cash dividends, investor relations management, information disclosure, share repurchase and other methods to promote the improvement of the investment value of listed companies.

in fact, earlier this year, the china securities regulatory commission opened the door to mergers, acquisitions and reorganizations. wind data shows that as of september 6, 151 listed companies have disclosed relevant developments in major restructuring events this year, while the number for the whole of 2023 is only 131.

different from the cross-border mergers and acquisitions that were hot topics in 2015, this year's mergers and acquisitions focus on resource integration within the industry, as well as mergers and acquisitions and restructuring around strategic emerging industries. the main goal is not to increase short-term stock prices, but to achieve long-term investment value. improvement.

the intensity of dividend and buyback policies has also been significantly increased.

in march this year, the china securities regulatory commission issued the "opinions on strengthening the supervision of listed companies (trial)", which proposed that for listed companies that have not paid dividends for many years or have low dividend payout ratios, they must enforce information disclosure, restrict controlling shareholders from reducing their holdings, and implement other risk warnings. (st) and other methods to strengthen regulatory constraints. if a listed company uses cash as consideration to repurchase shares and cancel them through tender offer or centralized bidding, the repurchase and cancellation amount shall be included in the calculation of the dividend payout rate.

stimulated by policies,the number of listed companies planning to pay interim dividends this year has exceeded the total of the past three years, and the total dividends have once again hit a record high for the same period.the number of listed companies that issued buyback plans reached 1,296, nearly double the 611 companies last year and setting a record high. in particularkweichow moutaithe 6 billion repurchase plan is not only the first in more than 20 years since its listing, but also set a record for a-share repurchase this year. it is obviously an obvious move to protect the market.

▲companies whose a-share repurchase amount exceeds 1 billion this year, source: flush

【king zha】

the biggest benefit to the stock market policy this year is actually not from the china securities regulatory commission, but from the central bank.

at the state council information office press conference before the national day, the central bank announced that it would establish a new special re-lending tool to support the repurchase of listed companies and the increase of stock holdings by major shareholders and stabilize the capital market. the first-phase quota is 300 billion yuan, and the future can be expected use the situation to expand the scale.

at the same time, the central bank will also create swap facilities for securities, funds, and insurance companies to support qualified securities, funds, and insurance companies, and obtain liquidity from the central bank through its own stock etfs and other securities assets as pledges. the futures swap convenience operation scale is 500 billion yuan, and the scale will be expanded depending on the situation in the future.

"i told chairman wu qing that as long as this matter is done well, we can receive another 500 billion yuan in the future, or a third 500 billion yuan. we are open to it."the statement by pan gongsheng, governor of the central bank, is profound.

from a legal point of view, the central bank cannot directly invest in stocks. the swap facility policy means that the central bank, which represents the will of the country, can continue to hold stocks in disguised form. against the background of currency idling in the banking system, the entry of the central bank means that the stock market will become a new channel for additional currency issuance, assuming the functions of activating currency and boosting the economy. the importance of the stock market has been elevated to an unprecedented position.

in other words, this is essentially the chinese version of quantitative easing, which will bring in a steady stream of incremental funds while having an extremely huge and far-reaching positive impact on the stock market.

the central bank broke through numerous resistances and exited directly, obviously recognizing the disruptive role of the stock market in the current environment.

china has more than 200 million stockholders, and it is estimated that more than 200 million people invest in the stock market through funds. a rise in the stock market means that the wealth of more than 400 million people will increase, and consumption will be greatly boosted.

for listed companies, an active market and rising stock prices mean better financing and operating environments. the problem of some chinese companies being large but not strong will also be solved to a large extent.

of course, it will take time for the policy to be implemented and fermented, but with the great changes in the market ecology and the support of the country's will, a-shares, whose valuations are already relatively attractive, will have new imagination and room for imagination.

we should have a little more confidence and patience, and give a-shares a little more time. our goal is not to make the stock price brilliant in the short term, but to keep it bright in the long term.

disclaimer

this article involves content about listed companies and is the author’s personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports, official interactive platforms, etc.); the information or opinions in the article are not it does not constitute any investment or other business advice and market cap watch disclaims any liability for any actions resulting from the adoption of this article.

——END——