Qiu Lin: China’s stock market impression that the world’s first misappropriating first falsification
Following the European Central Bank last week’s announcement to cut interest rates, Australia, South Korea had also added to the ranks of lowering rates. Global stock markets continue to triumph in a relaxed atmosphere inspired the U.S. stock market’s achieving a record high. In contrast, China’s stock market performance was very different, very gregarious, fell again after a slight rebound in U-turn at the beginning of this year, became the only declining market in the world’s major stock markets.
Throughout China’s stock market, we found that A-share bogged down in the quagmire, and closed lower for three consecutive months.
One may wonder why Europe and the United States economy continues to decline, but triumph in the stock market, China’s economy is relatively stable, but the stock market falls?
In this regard, SW Securities Research Institute, director of market research Gui Haoming told the whole story: “poor quality of domestic listed companies, the market system defects, making investors believe that they can not be rest assured to invest in the stock market in fear of capital investment being involved in the black hole devouring their wealth. ”
Gui Haoming view is tenable. China’s stock market seemed to be once again won the title of the worst performing stock market in the year. The reason, at least comes from two aspects:
First, the listed companies provided low dividend. Statistical Yearbook of China Securities Depository and Clearing Corporation shows that from 2003 to the present, the number of annual bonus increase, but it is very limited compared with the quantity of the stock market fund-raising.
Second, there is a surge in the number of enterprises IPO applications in contrast with the market falling. According to the China Securities Regulatory Commission published weekly IPO (initial public offering) report, the market decline did not affect the enthusiasm of the companies to go public, recently queuing number of enterprises to get listed increased rather than decreased. Industry sources say that in such a downturn of market enterprises still compete to go public shows the unfair treatment received by financiers and investors.
Such contrasts are contributed by some illegal brokerages. For example, the China Securities Regulatory Commission recently been investigated and dealt with Ping An Securities. According to the statistics showing that from 2010 to 2012, Ping An Securities sponsor a total of 87 A shares listed, including 57 with varying degrees of performance decline, accounting for over 60 percent of all the enterprises sponsored. Hail Health sponsored by Ping An Securities Division, was found with problem of inflated revenues and profits involving more than 300 individual accounts.
This gives the impression that the Chinese stock market is misappropriating and fraud in the world. This is the sorrow of the Chinese stock market and Chinese investors lack of confidence, thus the current China’s stock market crisis is a crisis of confidence which must be changed.