On January 12, at the 23rd Capital Market Forum, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, made a speech, and his content was a bit “smashed”

Here are the 10 main points summarized in “Sina Finance”. I have adjusted the order to facilitate the following analysis and comments:

1. The first day of the new stock price rose by 44%, there is no trading volume, and the price without trading volume is an illusory inaccurate price. The first day of the daily limit is going to be studied. I personally feel that it should be cancelled
2, now we must take measures to make the transaction further active, there is no problem of controlling peaks
3. It is necessary to give both the long and short sides sufficient means to allow the market to fully price the game 4, If the equity financing is not significantly improved, the macro leverage ratio will not be stable 5, The CSRC is guiding and coordinating with the Shanghai Stock Exchange. Based on the full appreciation of the market opinions and the opinions of various ministries, it is now working day and night to promote the development of the science and technology board and the registration system as soon as possible
6. Will work hard to introduce international medium and long-term funds into the Chinese stock market
7. It is expected that foreign capital inflows into A shares will increase further this year and is expected to reach 600 billion
8. Frequently guessing the bottom of A shares makes domestic companies afraid to buy, while foreign investors are desperate to buy
9. We will use the capital market to open up the enthusiasm of countries in China
10, some investment banks have indicated that they will increase their shareholding ratio to 100% after the policy allows, and the CSRC will strongly support it

In the 10th point, the 4th point is “Outline”, which explains the reason why the “era of stocks” must come. In fact, I have been talking about this since 2014

China’s “enterprise leverage ratio” is already the highest in the world. It continues to give “enhancement” to enterprises through “indirect financing” (mainly bank loans), and there is little room for it. In the first half of last year, the top management has been working on “lowering leverage”, and the current formulation is “stable leverage”

“Stable leverage” means that loans can be increased, but in line with GDP, the debt ratio of enterprises should not be increased The enterprise “plus power” needs to pass “direct financing” (equity and bonds), which depends largely on the stock market, so the stock market must be active

But with the lessons of the 2015 “Policy + Leverage” bull market, this gameplay is different. The “pilot registration system” was proposed at more than 2,000 points, and the market was gradually opened up and deregulated Today’s speech by Fang Xinghai is actually a “policy blow” with a fierce firepower

In short, from 2019 onwards, China’s steady growth and economic transformation depend to a large extent on the stock market. Not only rely on Hong Kong stocks, US stocks, but also rely on A shares

As for the 5th to the 10th, they are all specific measures. The expression “often guessing that the A-share bottom makes the domestic not dare to buy, but the foreign capital is desperately buying” is suggesting to the market that the A-share has already had investment value

Focus on 1 to 3 points. Let me focus on the analysis below

For the “maximum limit” on the first day of IPO, the “Personal Advice” of the Vice Chairman of the CSRC was cancelled. This statement is a bit strange. My opinion is that “personal advice” will soon become a “policy” and there should be no surprises

what does this mean? It means that the new stocks will become a very exciting game. , If the market goes up and down on the first day of the listing, there will be a lot of trading and huge fluctuations. You can “double” in one day or lose more than half in one day. But as a result, the market will be activated

Article 2, “Now take measures to make the transaction more active, there is no problem of controlling peaks”, and Article 3 “To give both long and short parties sufficient means to allow the market to fully price the game”, then A bigger imagination

“T+1” may be revoked, “T+0” or will be implemented

The so-called “T+0” means that the stock bought on the same day can be sold the same day. This means that you can buy and sell a stock innumerable times in a day, and you can do super short-term

In October 1993, I went to Shenzhen from Tianjin to participate in the preparation of the “Shenzhen Evening News” and became the first securities’ reporter of the Shenzhen Evening News. In November, the Shenzhen Stock Exchange announced the implementation of “T+0”. Later, I became a shareholder and experienced the era of “T+0”

If “T+0” is implemented, the stock turnover of the exchange will soar, and the total turnover of the two cities in one day will exceed 2 trillion again. It will no longer be a dream. Fang Xinghai said that “there is no problem of controlling peaks” is what this means. By that time, the government’s stamp duty income will also be full

Well, another important question has come: Since the ups and downs of the first day of IPO listing can be cancelled, will the market’s ups and downs be canceled? The current price limit was established in December 1996 and has been more than 22 years old

In fact, in the early days of A-shares, there were also ups and downs, and they also played “asymmetric fluctuations” (see the figure below):

Have you seen it? The most important thing is: “Shenzhen Securities Market Leading Group” (there was no CSRC at that time). On November 20, 1990, the regulations were issued. The stock price can only rise by 5 每天 per day, but it can fall. 5%

The above chart is from the memoir of Sui Guogang, the main founder of the Shenzhen Stock Exchange, “Shenzhen Story”. Yan Guogang has just been awarded the title of “100 Reform Pioneers” for the 40th anniversary of reform and opening up, and is a rare candidate in the financial sector. I interviewed him many times that year

In the era of no ups and downs (pre-90s to mid-term), what miracles will happen?

The screenshot above shows the amazing trend of “Northeast Electric (000585)” “doubled in one day” on October 17, 1996. That big rise made management determined to resume the ups and downs

A “non-new stock” has risen more than 100% in a single day and looks very good. Actually not,. The evil Chinese stock market has also created even more amazing records. On May 21, 1992, the Shanghai Composite Index doubled once a day (see chart below):

The entire market is doubled every day, which is extremely rare in the world. The reason for the big increase was that the exchange “cancel the price limit”, and the stocks listed at that time were very few. This happened when everyone went up together (the turnover was only 181 million yuan, which is already the amount of the day)

Ok, we don’t talk about history If you really recover “T+0” and then completely cancel the price limit, what will happen? There will be even more jaw-dropping situations, and it is possible for the exchange’s computer system to be “exploded” by huge transactions

My guess is: The first day of the new stock will be cancelled, “T+0” is also very likely to be achieved, but the overall cancellation of the price limit may not (but you can try to implement a 20% rise and fall). In addition, the stamp duty may be further reduced, and the stock index futures trading will be further relaxed

Even if you only do this step, it will be very exciting. The flow of funds into the stock market should be expected. And the new stocks will become the most exciting “wealth game” in 2019

For ordinary retail investors, the chances of A shares increased greatly in 2019, but the chance of losing money also increased. For short-term masters, the rare opportunity to make big money is coming again!