The central bank of the China Securities Regulatory Commission shouted to support the multiple positive signals of A shares.

After the embarrassing situation of falling in recent days, China A-shares welcomed the voice of the CSRC and the central bank last weekend. Analysts here said in an interview with China News Service that the government is trying to build a systematic project to stabilize the stock market, which is undoubtedly conducive to stabilizing market confidence. Considering the overall situation of the current stock market, A shares are showing more positive signals.

The stock market bubble has been released to a considerable extent.

China Securities Regulatory Commission issued a notice on the evening of 6th, saying that at present, the bubbles and risks in China stock market have been released to a considerable extent, the market transactions are basically normal, the liquidity is abundant, and the internal stability of the market is enhanced. The rise and fall of the stock market has its own operating rules. Under normal circumstances, the government does not intervene. However, when the stock market fluctuates violently and abnormally, which may lead to systemic risks, the government will never sit idly by and will take various measures to stabilize the stock market in a timely and decisive manner.

It is worth noting that this is not the only official statement on the stock market in China recently. Zhou Xiaochuan, governor of China’s central bank, recently said at the meeting of G20 finance ministers and central bank governors that since the stock market adjustment, the leverage ratio has dropped significantly, and it has not had a significant impact on the real economy. At present, the exchange rate of RMB against the US dollar has stabilized, the stock market adjustment has been "in place", and the financial market is expected to be more stable.

In this regard, Dong Dengxin, director of the Institute of Financial Securities of Wuhan University of Science and Technology, said in an interview with Zhongxin.com that the official move is to persuade investors not to panic too much, to remind the stock market bubble that it has been released to a considerable extent, and to express its position that it will intervene and stabilize the market in due course; Considering that the current on-site financing balance of A shares has dropped to about 1 trillion yuan (RMB, the same below), returning to the level at the end of last year, and the P/E ratio of some stocks has also shrunk significantly, A shares are showing more positive signals.

Xu Hongcai, director of the Economic Research Department of China International Economic Exchange Center, also agreed. Xu Hongcai believes that the current Shanghai Composite Index has dropped from more than 5,000 points in the middle of the year to around 3,000 points, and the bubble accumulated before mid-June "has been basically squeezed out". In addition, unlike previous rounds of adjustment, the shock of China A shares in late August had a negative spillover effect on the global stock market to a certain extent, which deepened the doubts about China’s economy.

Xu Hongcai further pointed out that in this case, the official made it clear that the stock market adjustment was basically in place, which was not only a judgment based on facts, but also a consideration to boost the confidence of domestic and foreign investors in China’s economic and financial stability.

Affected by this, the Shanghai Composite Index, a representative of A-shares, changed its downward trend, opening lower and going higher. As of the close of the morning, the Shanghai Composite Index rose 0.87% to close at 3,187 points.

Create a systematic project for "stabilizing the stock market"

In view of the future work arrangement, the CSRC indicated that it will continue to take stabilizing the market and preventing systemic risks as the primary task, organically combine stabilizing the market, repairing the market and building the market, focus on cultivating an open, transparent, long-term stable and healthy capital market, and put forward four measures, including cultivating and developing institutional investors.

In this regard, Dong Dengxin said that this move shows that while maintaining market stability, the regulatory authorities are continuing to promote the marketization and legalization of A-shares. Regulators put forward the main starting point for the next step, and do a good job in market construction. Its core is to create a systematic project for "stabilizing the stock market", rather than simply focusing on the market trend itself, so as to avoid piecemeal treatment.

Dong Dengxin believes that the abnormal fluctuation of the stock market has further exposed the immature stock market and imperfect system in China, and the above measures of the CSRC are targeted measures to try to overcome related problems.

"The development of institutional investors is to reform the status quo of A-share retail market, and the reform of registration system is to reform the policy market." Dong Dengxin said that the scheme of fuse mechanism that has attracted much attention is to make up for the existing price limit system and put forward a stricter market protection mechanism.

Fuse mechanism or introduction: stricter than the price limit system

The so-called fuse mechanism is a protection mechanism established by the US Securities and Exchange Commission. According to the latest regulations of the SEC, when the S&P index falls by 7% in a short time, all securities market transactions in the United States will be suspended for 15 minutes.

According to Cheng Xiaoyong, assistant director of Baocheng Futures Finance Research Institute, the fuse mechanism is equivalent to a "shock absorber". Its benefits are as follows: first, it provides early warning for the trading risks in the market, effectively preventing the suddenness and seriousness of risks; The second is to gain thinking time and operation time for controlling trading risks; Third, it is conducive to eliminating the decline in liquidity in the futures market caused by outdated prices; The fourth is to provide institutional guarantee for gradually resolving transaction risks.

Dong Dengxin pointed out that, in fact, the 10% price limit system and the temporary suspension system of new shares currently implemented by A-shares belong to the fuse mechanism in a broad sense. In this sense, the regulatory authorities proposed to study and formulate a scheme to implement the index fuse mechanism, perhaps because of formulating a stricter temporary suspension mechanism.

Dong Dengxin further pointed out that the new regulations may implement 8% reduction fuse arrangement for weighted blue-chip stocks, such as "two barrels of oil" and "four major banks", but the fuse mechanism should not be abused in individual stocks. As far as the index is concerned, it may be appropriate to set a melting point of 6%, that is, when there is a 6% decline in the Shanghai Composite Index or the Shanghai and Shenzhen 300 Index, trading will be suspended for a period of time to give the market a cooling-off period, so that investors can fully digest market information and prevent irrational large fluctuations in the market. (Reporter Chen Kangliang)

Click to enter the topic of "Maintaining the Stability of Capital Market"