Chapter 208 Everything is just a beginning
The market always moves in a direction that no one expects.
Just when Lao Chen thought that the Shanghai Composite Index was bound to break 3100 points, the market suddenly began to fall in the afternoon, all the way to 3062.76 points, a direct drop of 0.72%.
It almost wiped out all of yesterday's gains.
The ChiNext led the decline, with coal, nonferrous metals, and shipping all falling. Hainan Rubber, which had soared and closed at the upper limit for two consecutive days in the previous two days, also fell 4.87%.
In addition, the brokerage firms that soared yesterday all pulled back today. The brokerage ETF fell directly by 1.82%, which can be said to be a one-day trip.
In addition, China Heavy Industry, which Lao Chen had just bought, also fell in the afternoon and closed down 1.28%.
"Oh my! Why does everything I buy go down? I shouldn't have bought it earlier..." Old Chen was annoyed. He looked at the candlestick chart of China Heavy Industry and muttered, "I've been weaving all day. A rise of a few cents is like climbing to the sky. A drop of a few cents won't take more than a day..."
"Luckily I only bought 10%..."
Old Chen closed the transaction page in disappointment and prepared to go out for a walk in the park.
Over there, Xiao Bo and Li Feng's conversation continued.
The content of the conversation ranged from the Nikkei index returning to 40,000 points, to the Bank of Japan's decision to end negative interest rates and raise interest rates for the first time in 17 years, setting the interest rate between 0% and 0.1%, to Putin's election as Russian president.
Finally, after going around in circles, whether intentionally or unintentionally, Xiao Bo actually shifted the topic to the outlook for the A-share market.
Li Feng looked at the lake and thought seriously for a while before saying:
"No matter how we speculate, it is very likely that the direction of our Guojia stock market will not only be different from before, but also different from the United States. It will take a completely new path."
"Huh? A brand new road? What road?" Xiao Bo couldn't help but widen his eyes, a little confused.
What is different?
What is the same?
Weren’t the two of them just looking forward to the most ideal path for the Shanghai Composite Index?
What? It’s only been less than a few hours, why did Li Feng change his mind again?
It seems that the Shanghai Composite Index hasn't shown any surprising movement in the past few hours, only dropping by less than a point.
Could it be that some major policy has been introduced?
Li Feng put down his fishing rod, looked at the lake, and said leisurely:
"Last year, the top leadership held a 'Central Financial Work Conference.' This conference was of exceptional importance because it is a high-level meeting held only once every five years and is even more important than the annual Central Economic Work Conference."
"At this meeting, the concept of 'building a strong financial nation' was mentioned for the first time."
"More than two months later, a very specific definition was given on how to build a financial powerhouse: 'a strong currency,' 'a strong central bank,' 'strong financial institutions,' 'a strong international financial center,' 'strong financial supervision,' and 'a strong financial talent pool,' or the six strengths in short."
"In essence, it means that if the RMB is to become an international currency, our central bank must have strong international influence, our financial institutions must be adept and courageous in competing with foreign financial institutions, and our Shanghai and Hong Kong must become international financial centers."
"Therefore, at this meeting, it was particularly emphasized that financial supervision must be sharp and thorny, with sharp edges and corners, and financial supervision must be comprehensive and comprehensive."
"So, in a sense, the CSRC's leadership change was a political undertaking. That's why, during his first appearance at the Two Sessions, he stated that he would focus on two areas: strengthening the company's foundation and strictly controlling listings; and combating counterfeiting, regulating share reductions, and promoting dividends..."
"That's why the central government released four policies in one go just two days ago."
Hearing this, Xiao Bo couldn't help but frown.
If that is the case, how can we develop finance with Chinese characteristics?
How should we build a stock market with Chinese characteristics?
In this case, 2024 will be a watershed year. Before that, it will be just small-scale fighting, but after that, it will be real action.
The Chinese stock market is a policy-driven market. Every move from above, when magnified to the stock market, becomes a surging wave. If you follow the trend, you will surely be able to sail smoothly. If you go against the current, it is doomed to be extremely difficult, and you may even end up capsizing and dying.
Be sure to keep your eyes open and pay attention.
"What do you think will happen to the stock market in the future?" Xiao Bo asked solemnly.
"The future..." Li Feng couldn't help but frown after hearing the voice.
After a moment, Li Feng continued, "We can speculate on the future from the words and phrases of the current upper echelons, as well as from the United States across the ocean."
"One thing is certain: as a socialist country, we must develop a stock market with Chinese characteristics, and the financial sector must adhere to the leadership of the Party and accept its supervision."
"On the other side, the United States is the opposite. It is a capitalist country where capital controls everything, including the stock market..."
"For them, this financial game means wealth, a never-ending wealth-making machine that harvests domestic and international wealth with the fastest and highest efficiency on the planet, nourishing all kinds of capital..."
"Amidst this relentless harvest, and lured by the lure of money, vast numbers of talented individuals have flocked to Wall Street, chasing wealth and becoming lost in it... This capital- and efficiency-oriented approach has led to the decline of all types of manufacturing... This shift away from the real economy and into the virtual economy has reached its extreme, directly undermining the nation's foundation..."
"So, now the United States is promoting the reshoring of manufacturing."
After a pause, Li Feng continued, "Our country's policy has always been to cross the river by rubbing the buttocks of the Eagle Sauce."
"It's precisely because the US has become so entrenched in its shift away from the real economy and into the virtual economy that Guo Jia has repeatedly stressed the need to strictly prohibit this shift, repeatedly reiterating that manufacturing is the foundation of a nation, and repeatedly repeating that finance must serve the real economy..."
"What is certain is that in the future, we will have to regulate the stock market with great force, even to the extent that many people don't expect, and in contrast to our previous attitude of imposing fines."
"If those large speculators, black-hearted institutions, and unscrupulous companies continue to use the same tactics as before to deceive their superiors and subordinates and exploit retail investors, they will die miserably. If they don't change their minds, they will be replaced."
"Second, the future direction of our stock market is a slow bull market, because we have to accept, or in other words, share, our profits in the global industrial chain with other partner countries..."
"This model is like the petrodollar that Saudi Arabia and the United States used to work on... It's also an important task after the internationalization of the renminbi..."
"That is, we print RMB to buy resources - they export resources and get RMB, use some of it to buy our industrial products, and invest some in our stock market - and we recycle the RMB, forming a cycle."
"Therefore, we must ensure that our stock market no longer experiences the dramatic ups and downs, bull and bear cycles, that it did in the past. We must maintain a slow bull market and provide others with stable expectations. In other words, we must offer them a market with relatively high returns and attractiveness compared to the rest of the world."
"And this, in turn, requires further improvement in the quality of listed companies."
“Perhaps, it is precisely because of this that GZW has recently been assessing the market value and performance of central SOEs.”
"Everything is just the beginning."
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