Zero real increase in the stock market years of reflection

 Years of zero real increase in the stock market reflect
established securities market in China this year marks the 20th anniversary worth celebrating. But look at changes in the stock market over the past decade, in addition to a substantial expansion of market scale, with a total market capitalization ranks third in the world outside From the perspective of return on investment is really miserable. The Shanghai Composite Index closed at the end of 2000 2073 points, 7 June 2511 on the card index for the points. nearly a decade in the name of rose only 21.1%. and then examine the past decade the cumulative consumer price index increase, CPI has risen by 22% or so (this year's CPI rose by 3% per). If you do not consider the split share structure reform will bring in additional income to investors, the Shanghai index and CPI's increase is almost the same. In other words, the stock price index over the past decade close to zero real increase. And in the past 10 years, the increase in nominal GDP is estimated at 380% of (nominal GDP in 2000 was 9.9214 trillion, this year than last year according growth of 4 trillion calculation, as 37535300000000). can be seen in the economy has maintained rapid growth, our capital market has performed very poor, and its why? Although we can through a variety of calculation methods, accurately drawn Which industry or sector index was dragged down the culprit, which actually outperformed the index plate number, but I believe that, contrary to common sense for the return on investment, but should reflect the perspective of the market mechanism.
rate of return on stock investment too low, is that these reasons: poor profitability of listed companies, investors and investment costs are too high misconduct. to involve three types of market participants: issuers, investors and regulators. from the stock the issuer's point of view, the past 10 years can be described as golden years, the stock issue has always been in short supply,cheap UGG boots, but once listed, its profitability is very mediocre, such as rate of return on net assets from the comparative perspective, such as the A shares from 2000-2003 years, less than 10%, while both the S & P or Bombay SENSEX, which includes the net assets of listed companies in the 15% rate. Although in 2004 China's A shares since the return on equity has been a marked pick-up but still quite P, but lower than Mumbai SENSEX, but the average annual GDP growth rate in China is far higher than the U.S. and India. visible, poor profitability of listed companies also contributed to the cause of low investment returns. In China, investors which often spreads to win the main purpose of the concept of heavy, light dividends,UGG bailey button, which may lead to the behavior of listed companies underestimate earnings, for example, listed companies are keen on hot in the market, the concept of themes such speculation during the refinancing, which also led to the size of the world's first refinancing. Meanwhile, investors generally love small cap, tired broader market, the level of small cap stocks price-earnings ratio is usually in the last 10 years, 2-4 times as large capitalization stocks, which is a lot of large cap stocks than financial corresponding to 20% discount H shares the reasons, resulting in stock can not go up.
high cost of investment, return on investment over the past decade is probably the main reason for low rates. this regard with the level of China's stock market valuation related to the high side, on the other hand the stock issuance costs involved. Although in the past decade the way of issuing a revised again and again, but can not change the reality that investors get shares in IPO and refinancing costs are increasingly The higher a; the same time, by the richest man in the Chinese stock offerings is also increasing the number of list. So, how to reduce the cost of investors to get stock and how this changes over 20 years of a seller's market for the sale of fair market eventually become a mature buyer's market, I am afraid that need to be more market-oriented mechanism and the wisdom of regulators. because in the past decade, the total price downturn in the decision to suspend the issuance of shares, in a time of high stock prices sent stocks hard, so investors The cost to get the stock will always be high. While the issue price of the market now, but the issue size has not the market,Bailey UGG boots, the pattern in short supply, investors get a share of the cost even higher.
In such a 20-year history of the emerging markets, the behavior of the participants are affected each other, not to mention who should bear the responsibility, but we should improve the market-oriented tools, rather than administrative means, to change the mechanism not expected. For example, we always used the market downturn, investors are expected to change some stop-gap policy, trying to change the pessimistic investor expectations. The facts show that these policies can only save the moment,bailey UGG boots, but can not fundamentally change the market trend. Therefore, for such a background of rapid economic growth in the stock market, how to protect the interests of investors, how to control the asymmetry of the issuer and investor use of information carried out by misappropriating childish behavior really should start from the perspective of the mechanism. mature market history tells us that a healthy and perfect market, the stock index should not only be more than CPI, GDP growth should also be exceeded.