Economic Daily: To enhance confidence, determination, and patience in the A-share market, there has been an increase in recent stock market fluctuations | financing amount | A-shares
Recently, the volatility of A-shares has increased, and some investors have experienced ups and downs in their emotions, feeling anxious and uneasy. This reflects that some funds do not have a clear understanding of the current situation, and there may even be emotional venting.
The primary task for all parties involved in the current market is to clear the fog of obstacles, have a clear understanding, strengthen confidence, determination, and patience.
Firm confidence. The core factors related to the long-term performance of A-shares, such as fundamentals and liquidity, are still relatively stable and continuously improving.
In terms of macroeconomic fundamentals, from the situation in April, the year-on-year growth rate of China's main production demand indicators has rebounded significantly, the economic operation continues to recover, and positive factors have accumulated and increased. In terms of liquidity, the market liquidity has always remained reasonable and abundant, with a M2 balance of 280.85 trillion yuan at the end of April, a year-on-year increase of 12.4%; At the same time, the overall savings rate of residents is high, and there is great potential for investment conversion. With some banks lowering deposit interest rates, the potential incremental funds in the stock market in the future are considerable. In terms of valuation level, the A-share market is still at the bottom of valuation and has a strong competitive advantage.
The good news is still gathering. The new round of quality improvement actions for listed companies is deepening, and the focus of work is shifting from "rectifying chaos" to deeper "improving quality". The standardization of listed companies is steadily improving, and their role in leading innovation is becoming increasingly prominent. Overall, the basic support for A-shares to emerge from a positive market is still solid and strong.
Be determined. A healthy and stable capital market cannot do without continuous self innovation. In a volatile pattern, creating a good investment environment and profit making effects is necessary to enable investors to invest with confidence and boldness.
The phenomenon of "heavy financing, light investment" needs to be reversed. With the implementation of the comprehensive registration system, the number and financing amount of A-share listed companies have reached a new level. While satisfying the funding needs of enterprises, attention should also be paid to investment returns. On the one hand, we need to continue to improve refinancing methods such as private placements and rights issues, curb the excessive and frequent financing behavior of listed companies, and avoid the phenomenon of "fishing for all"; On the other hand, it is necessary to establish and improve a normalized delisting mechanism, increase the clearance efforts of "shell" and "zombie" enterprises, and allow funds to flow more accurately to high-quality enterprises, obtaining the necessary positive feedback.
Reward investors positively. Since the beginning of this year, thousands of listed companies have issued plans to reduce their holdings. Although reducing holdings is a legitimate right of enterprises, large-scale centralized and clearance style reductions are likely to erode investor confidence. Listed companies should further enhance their sense of responsibility and prioritize normalized and institutionalized returns to investors. By implementing deregistered buybacks, stable and reasonable dividend payouts, they can share development achievements with investors and enhance the attractiveness of the enterprise.
Attracting long-term funds requires extra effort. Long term funds are the "stabilizer" of the capital market. Currently, there are still bottlenecks in the entry of insurance funds, social security funds, and other funds into the market, and further efforts are needed to break the "intestinal obstruction". For example, appropriately relaxing the entry threshold and optimizing the entry ratio requirements, providing a more sufficient stage for long-term funding to showcase; We will continue to promote high-level opening-up to the outside world, expand the scope of the Shanghai Shenzhen Hong Kong Stock Connect, and expand the supply of international commodity and financial futures products, in order to attract more long-term funds that are willing to come and can be retained.
Maintain patience. Investors should also muster up their spirits and always maintain the rationality and wisdom of value investing and long-term investment.
In fact, from a global perspective, although the performance of A-shares has not been outstanding since the beginning of this year, it is not too bad. As of the close on June 1st, the Shanghai Composite Index has risen by nearly 4%, breaking through 3400 points at one point this year, reaching a new high in nearly 10 months. Investors should learn to stabilize their mentality in market fluctuations, firmly believe that the long-term trend of China's economy will not change, firmly believe that the pace of comprehensive deepening reform of the capital market will not stop, and not be disrupted by short-term fluctuations.
As long as all parties have firm confidence, determination, and patience, do their own things well, and walk the right path, difficulties will be easily solved, and funds from various sources will flock in. A-shares will naturally emerge from a beautiful upward curve.
