Thursday, November 6, 2008

A stock market stabilization fund remains in the doldrums out how?

Recently, A-share market remains in the doldrums, despite the recent stock market to stabilize the external rebound, the Hong Kong stock market has good performance, but the A-share market is still no improvement, or do not follow up with the growing phenomenon. Stabilization Fund of the great care must be taken out, or is likely to aggravate the volatility of the market, slow out of the market at the bottom of the time, even in addition to stabilize the market can not achieve the purpose, so that the stabilization fund will be scarred.

Recently, A-share market remains in the doldrums, despite the recent stock market to stabilize the external rebound, the Hong Kong stock market has good performance, but the A-share market is still no improvement, or do not follow up with the growing phenomenon. In view of this, some market experts and scholars in the industry and senior government intervene in the stock market increasingly strong voice, and the stabilization fund was seen as a magic weapon for the government to save the city of weapon. But after the stabilization fund can really smoothing out market volatility, so that no A-share market staged large counter to it?

The so-called stabilization fund, also known as intervention funds, the Government refers to the adoption of specific statutory body in order to create the fund. Sound stabilization fund out of the irrational in the current state of the A-share market should be able to play a good effect, but not necessarily the case.

It was suggested that the country's foreign exchange reserves set aside 100,000,000,000 U.S. dollars to establish stabilization fund, which is China's huge foreign exchange reserves is not impossible. Assuming the introduction of stabilization fund, or buy blue-chip heavyweights, this led the market upward bounce is normal, this result appeared to be happy. But the problem is that after the stabilization fund how to do? State funding is limited, it is clear stabilization fund has been impossible to buy or hold stocks, and also the establishment of the stabilization fund is incompatible with the original intention. However, if the stabilization fund out of stock, out of this position will no doubt be a rebound in the end, and will be a high degree of market constraints of resistance. This is A-share market is by no means a good thing. Moreover, the size of the non-existence of the stabilization fund also had to consider before the launch. Stabilization fund into the market after the stock market will undoubtedly warmer to the size of the reduction of non-greater power. Let us put aside the size of the non-heavy sell-off would hedge the stock market stabilization fund after the momentum brought about by the rise, but we have to ask, is to use the money to feed the country's large and small non?

Although the stabilization fund has not issued, but we can sell the company Huijin earlier in the secondary market to buy their own work, such as the construction of three state-owned bank shares to imagine the situation stabilization fund may be introduced later. If the bank in the stock market as a plate, then Huijin also can be seen as a "stabilization fund." Let us take a look at this "stabilization fund" introduced after the Bank of plate movements. There is no denying that Huijin's holdings, the bank board has undergone tremendous rise, but the rebound only lasted a few days, and in late October the market is more shocking. Huijin's holdings compared to the three banks, the stabilization fund will be the face of adverse circumstances more clearly, the prospects for stabilization fund is indeed a cause for concern.

Therefore, the stabilization fund the great care must be taken out, or is likely to aggravate the volatility of the market, slow out of the market at the bottom of the time, even in addition to stabilize the market can not achieve the purpose, so that the stabilization fund will be scarred. At present, the key lies in the adoption of macro-control to ensure that our macro-economy stable and rapid development, making the overall profitability of listed companies improved in order to reverse the current market of the future performance of listed companies is expected to pessimism. At the same time, the stock market to strengthen the system and improve the market system as a whole, so that more people will be willing to put money into the stock market, in such circumstances, introduction of stabilization fund in order to truly play its "skillfully deflected the question". Otherwise, introduced a stabilization fund and how well?

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