After the impact of the financial crisis, European and American stock markets have come out of the doldrums one after another: the Dow Jones index has regained 13, points, Nasdaq has reached a new high in 12 years, and several major European stock indexes have also returned to the levels before the 28 crisis. On the other hand, China, which has not been affected too much by the crisis, is in a mess, even falling below 2 points and hitting a new low, which is called "bear" dominating the world.
In order to boost the capital market, Chairman Zhou of the former China Securities Regulatory Commission called for a bailout, which triggered a discussion in the industry about whether to rescue the market or reform it first. In order to make the right choice, we need to analyze the above two ways and distinguish which is just to raise the soup and stop the boiling, and which is the real radical solution.
First, the traditional rescue of the market "saves the sick" does not "save lives"
In fact, in the face of this "bear-like" situation in China stock market, the macro-control departments have a certain basis to rescue the market. From the practical experience of foreign countries, in order to cope with the financial crisis, developed capitalist countries in Europe and America have rescued the market one after another, and effectively avoided the further spread of the crisis by purchasing equity, directly injecting capital, providing credit guarantee for financial institutions, and implementing long-term proactive fiscal and monetary policies. For example, on November 3, 211, six global central banks, including the Federal Reserve, joined hands to rescue the market, which stimulated the European and American stock markets to soar.
judging from China's own practice, the traditional three measures to rescue the market have been tried and tested in the past: "the first measure"-issuing an editorial, for example, on June 7, 26, Xinhua News Agency published "Forging the Foundation of a Bull Market", and then A shares ushered in the biggest round of bull market; The "second move"-Huijin increased its holdings. For example, on September 19, 28, Huijin announced that it would increase its holdings of shares of ICBC, China Construction Bank and China Construction Bank, and the market immediately rose by 9.45% the next day. The "third measure"-the supervision of high-level orders, for example, on May 19, 1999, Comrade Zheng Qing, then chairman, delivered a speech to release the signal of "saving the market", and the stock market immediately rose.
However, it seems that Bailing's traditional three measures to save the market have failed this time. Xinhua News Agency issued editorials to influence public opinion-on September 26th, "Shareholders should brace themselves to cope with the 2-point A-share market, but it is not worth despairing" and on September 27th, "The voice of saving A-shares is getting stronger and stronger". Huijin has repeatedly increased its holdings to create a favorable market, and the current Chairman of the China Securities Regulatory Commission, Guo, supports the blue-chip market, and high-level positive signals frequently appear, but the market is always hard to see improvement, often falling again after a slight rebound, or even hitting a new low.
It can be seen that although the traditional rescue model can temporarily alleviate the stock market downturn, it can treat the symptoms but not the root cause. In the long run, it will only make investors completely lose confidence, and will eventually endanger the long-term development of the capital market, which is tantamount to quenching thirst by drinking poison. If we want the stock market to truly embark on the track of benign development, we can't just stay at the level of "saving the disease"; We must find the "root cause" and prescribe the right medicine in order to "save lives".
Second, the "root cause" is the lack of equity and efficiency in the stock market
The international environment, the macroeconomic situation, the quality of the boss company and relevant policies are the four main factors that affect the stock market. In order to find out the root cause of "Beargguy Globality" in China stock market, we must start with these four factors and make a detailed analysis.
from the international environment, due to the strong independence of China's banking, monetary and capital market systems, the subprime mortgage crisis and sovereign debt crisis have not had a substantial impact on China's economy, but have given China a rare opportunity to seize the commanding heights of the global economy by developing the capital market. At the same time, China's macroeconomic situation is improving. In 211, the GDP growth rate was 9.2%. Although it declined in 212, it is still expected to be around 7.8%. Besides, I said that the quality of listed companies is not bad. However, in the first half of 212, the operating income of listed companies in China reached 11.6 trillion yuan, a year-on-year increase of 9%, and the net profit reached 1.1 trillion yuan.
Therefore, none of the above three factors can explain the sluggish stock market, and the influence of policies has naturally become the key to the continuous decline of the stock market. Compared with monetary policy, the most important reason for the sluggish stock market in China is the inherent institutional defects of regulatory policies. The "root cause" of China stock market downturn is the lack of fairness and efficiency, and the institutional defect of the issuance system is the main cause of this problem.
first of all, the regulatory authorities are a combination of approval and supervision, and they are keen on approving "beauty contests" for investors, rather than grasping the supervision of "bad guys". There are many benefits of beauty pageant, not to mention the affair, but also to benefit from helping people who are not beautiful to become beautiful; However, catching the bad guys has neither the enjoyment of beauty nor the danger of their lives, and the interests are in sharp contrast. Normal people will put most of their energy into beauty contests, and eventually they are busy planting fields for approval, but they have no place for supervision.
at the same time, the validity of this kind of approval is also open to question. Taking the GEM listing threshold as an example, the regulatory authorities have stipulated two quantitative performance indicators for enterprises applying for listing: First, enterprises have made continuous profits in the last two years, and the accumulated net profit in the last two years is not less than 1 million yuan, and it continues to grow; Second, the company made a profit in the last year, with a net profit of not less than 5 million yuan, an operating income of not less than 5, yuan in the last year, and an operating income growth rate of not less than 3% in the last two years. However, the performance of many companies has been declining after listing, which makes the "high growth" of the GEM nominal. According to statistics, in the first three quarters, the number of companies whose performance declined year-on-year reached 223, accounting for 63%, of which 71 companies experienced a year-on-year decline of more than 5%, accounting for 2%. Eleven companies lost money in the first three quarters, which is the largest number of companies recorded losses at the end of a single reporting period in the history of GEM.
but who will be responsible after such a problem occurs? Distribution Department, Sponsor, Sponsor Representative, or Broker? The reality is that as long as the issuance examination and approval department and the issuance examination Committee have the power to issue the examination, the sponsors and underwriters only have the interests, and no one is willing to bear the responsibility if something goes wrong, but they are pushed to the shareholders at their own risk, and their responsibilities and rights are not unified.
Secondly, in the examination and approval process, the regulatory authorities carried out substantive examination, "and while one man guards it, many people are sad", and engaged in "hunger" issuance, resulting in false supply and demand, which paralyzed the value discovery function of the stock market and caused the market to lose fairness and efficiency.
Take the Growth Enterprise Market as an example, there is a serious phenomenon of "three highs" in the IPO of GEM companies. The total amount of funds raised by 355 companies has exploded to 2 billion yuan, and the P/E ratio is as high as 72 times. The IPO over-raising ratio is as high as 2%, creating 99 billionaires and more than 13 billionaire families. In sharp contrast, investors have suffered heavy losses, the GEM stock index has dropped from the original 1 points to 7 points now, and there are more than 6 small and medium-sized enterprises waiting to be listed. The unreasonable distribution of wealth has brought institutional damage to China's capital market and also hurt a large number of subsequent listed enterprises, which is obviously unfair.
If the supply is released and packaged for distribution, it will not only reduce the distribution cost, but also benefit more enterprises with the same funds. For example, it is obviously more efficient to release 4, small and medium-sized enterprises in the issuance process, and share the 2 billion raised by the 355 enterprises on the Growth Enterprise Market, and each enterprise will get 5 million yuan, which is enough to ignite the entrepreneurial passion.
In short, under such a bad issuance system, the responsibilities and rights of the regulatory authorities are inconsistent, the market is exhausted, and fairness and efficiency are lacking. In the end, the interests of sponsors, sponsor representatives, brokers and investors will all be damaged, resulting in a lose-lose situation. Therefore, in June, 21, I specially wrote an article "Reflections on the Lack of Fairness and Efficiency of Growth Enterprise Market" with Cao Fengqi and Xi Tao, hoping to make a modest contribution by scholars to set the record straight. However, some scholars like Dong Dengxin think that the "ceiling-to-floor" crash experienced by GEM is understandable and confusing, which makes the competent officials not listen to the criticism. In the end, GEM has paid such a painful price in the past three years, so irresponsible and sycophantic scholars must reflect.
Third, reform the issuance system
From the above analysis, we can easily see that to rebuild the fairness and efficiency of the stock market, we must start with the system and reform the issuance system. Specifically:
First, separation of supervision and examination, decentralization for examination and retention for record.
firstly, the examination and approval system should be changed to the approval system. The issuance supervision department should be willing to give up power, stop judging the investment value of the company, but return to the essence of supervision and be responsible for the industry supervision and accountability and punishment of the securities market.
secondly, the approval authority should be delegated to the exchange. The exchange becomes the main body responsible for the issuance examination and approval, and the issuance department carries out the procedural and authentic approval. As long as the company's listing application materials meet the real conditions, it cannot deny its listing qualification. Thus, resources can be freely and effectively allocated, the stock market can give full play to the function of value discovery, and investors can independently invest in value and survive the fittest.
finally, in view of the fact that the conditions for implementing the registration system in China's capital market are not yet mature, the filing mechanism of the regulatory authorities should also be retained, and the listing qualification of listed companies should be suspended once major problems are found.
second, do real sponsorship, joint brokerage, real supply and demand.
for securities issuing media, sponsors and sponsors' representatives should be the accountability objects of securities regulatory authorities, and if problems are found, they should be filed for accountability immediately. At the same time, under the current national conditions of China, brokers are not allowed to make direct investment. In addition, sponsors, sponsors' representatives and brokers are divided into three levels according to the performance of listed companies sponsored by them in one year: first, if the actual performance is lower than the predicted value by more than 3%, they will be warned; Second, if it exceeds 5%, it will be fined; Third, when it exceeds 1%, it should be "severely punished"-sponsors and sponsors' representatives are fined and their professional licenses are revoked, and brokers hand over all underwriting fees. If there are more serious situations or illegal acts, criminal proceedings should be initiated.
after clarifying the responsibilities and rights of the regulatory authorities and the distribution media, it is necessary to package the issuance through IPO. On the one hand, it will form the real supply and demand of the stock market, so that the market can allocate resources freely and effectively; on the other hand, it will reduce the issuance cost and price, and reduce the average P/E ratio of the Growth Enterprise Market to less than 2 times, which can also avoid the current situation that the IPO price is too high and the price of the secondary market plummets, leaving room for the price fluctuation of the secondary market and paving the way for the free delisting system in the future.
To sum up, although the China stock market is facing difficulties, there are still opportunities in the crisis. As long as we start with the issuance system, save the market through reform, and build a fair and efficient market by taking advantage of the east wind of the 18th National Congress, China's capital market will surely usher in a bright future.
Note: Professor Liu Jipeng is the director and doctoral supervisor of the Capital Research Center of China University of Political Science and Law;
Yue Fangxu is a master student in the Institute of Fiscal Science of the Ministry of Finance
About the author: Liu Jipeng, director, professor and doctoral supervisor of the Capital Research Center of China University of Political Science and Law. Member of the drafting or revision group of the Securities Law, State-owned Assets Law, Futures Law and Fund Law of the National People's Congress.