In order to further promote the healthy development of the securities market, with the approval of the State Council, the Ministry of Finance decided to adjust the stamp duty rate of securities (stocks) transactions from the current 1‰ to 3‰ from May 30, 2007. That is to say, the parties concerned shall pay stamp duty on securities (stocks) transactions at the rate of 3‰ respectively for the A-share and B-share equity transfer documents signed by the transaction, inheritance and donation office.

Raising stamp duty is undoubtedly a major "negative"! Judging from the results of previous increases in stamp duty in history, the blow to the broader market is obvious, and may even lead to the end of the bull market. But does historical experience necessarily apply to the current stock market?

I think:

1. The essential reasons for the start of the bull market-excess liquidity, RMB appreciation, and equity incentives after the share-trading reform will not change because of the increase in transaction costs and the adjustment of trading rules! In other words, the increase in stamp duty will only lead to short-term adjustment, and will not shake the direction of the trend.

2. The tax increase is indeed aimed at the stock market, but the purpose of the management is by no means to end this bull market, but to further promote the healthy development of the securities market and make this bull market healthier and longer-term. I believe that the management made this decision after comprehensively weighing the pros and cons.

3. tax increase is conducive to curbing excessive and irrational speculation. At present, there is a structural "bubble" in the bull market-ST and news stock speculation without performance guarantee. This increase in stamp duty will undoubtedly increase the cost of ultra-short-term speculation and institutional confrontation, and guide the market to invest in blue-chip stocks. In the long run, the advantages outweigh the disadvantages for the normal and orderly development of the stock market.

Therefore, gay friends should not be too alarmed. This bull market will not end yet. Today's sharp opening is still a good opportunity to intervene.