The turnover of gem exceeds the Shanghai stock market or repeatedly appears, and the Shanghai stock market needs to be reformed to enhance its activity

 The turnover of gem exceeds the Shanghai stock market or repeatedly appears, and the Shanghai stock market needs to be reformed to enhance its activity

Multiple factors boost the growth enterprise market trading volume, turnover exceeds the Shanghai stock market or repeatedly appears

Gem turnover once again exceeded the Shanghai stock market, mainly due to the investment preference of market funds. GUI Haoming, chief market expert of Shenwan Hongyuan Securities Research Institute, told surging journalists that the distribution of funds in the market has never been a simple linear distribution, but has its inherent law.

The growth enterprise market turnover increased significantly and then exceeded the Shanghai stock market, mainly due to two factors. Chen Xianshun, Guotai Junans chief strategic analyst, told surging journalists that on the one hand, it stems from the deregulation of the regulatory system. At the same time of the implementation of the registration system on the growth enterprise market, the price limit of old stocks and new shares was relaxed from 10% to 20%. The relaxation of the limit on the rise and fall within the day brought about an increase in trading volume.

On the other hand, the transfer of funds from the main board has further boosted the trading volume of gem. At present, the valuation of some companies on the main board is too high, which makes investors prefer the gem, especially the low-priced stocks in the gem, further boosting the growth enterprise market turnover. It can be observed that since the middle and late August, the gems low-priced stocks perform well. Chen Xianshun further pointed out.

It is worth noting that Gui Haoming stressed that it is a market trend for funds to flow to plates with higher activity and greater flexibility.

Institutional reform is needed to enhance the activity of Shanghai Stock Market

Looking forward to the future market, how to improve the market activity in Shanghai?

Generally speaking, to further enhance the activity of Shanghai stock market, we still need to start from reform. GUI Haoming said that if the main board of the Shanghai stock market also achieves a 20% rise and fall and the listing structure is adjusted to a certain extent, the trading volume of the Shanghai stock market and the GEM may change.

Referring to overseas experience, it will be the general trend to relax the rise and fall of other A-share sectors in the future. Chen Xianshun said that in terms of overseas price limits, there are no limits on the rise and fall of Hong Kong, Germany, the United States and the United Kingdom. In order to improve the efficiency of the equity market, Taiwan relaxed the intra day limit from 7% to 10% in June 2015. South Korea relaxed the intraday limit from 6% to 15% in just two years from 1996 to 1998. In June 2015, the limit was further relaxed to 30% in order to reduce price manipulation and revive the financial industry.

However, in terms of the pace of reform, Chen Xianshun believes that although the differences in various trading mechanisms between the Shanghai and Shenzhen stock markets will cause significant fluctuations in the trading volume and volatility of individual sectors, as well as frequent switching of market styles. However, at present, there is no need to rush to extend the relaxation system to other sectors. The process of relaxation still needs to be steady, so as to avoid large fluctuations in the market caused by too fast reform speed.

Chen Xianshun said: first of all, the reform of the trading system is a gradual process. At present, targeted measures have been taken to stimulate the vitality of various sectors according to their different characteristics. At the same time, the coexistence of various trading systems will help to examine and compare the advantages and disadvantages of different systems in practice, and lay a good foundation for future reform.

Secondly, it is very likely that the market volatility will rise and the style switch will be brought about by the relaxation of the rise and fall range. The gradual reform will help the market gradually digest, and the one-step reform may bring greater impact on the market. Chen Xianshun further pointed out that once again, the trading system of 20% rise and fall of gem does cause siphon effect at present, especially hot money, and hot money speculation is low-priced stocks with loss of performance or even negative news. However, with the increasing crackdown on violations of gem by follow-up supervision, the above problems will be alleviated.

Chen Xianshun stressed that it is the key period of market reform transition, and short-term fluctuations are inevitable. But more importantly, compared with the past, the A-share market is much more mature. In the future, with the increase of the proportion of long-term capital of A-share, market speculation will be further reduced. Therefore, at present, there is no need to rush to extend the system of price fluctuation relaxation to other sectors.