A50 hit A new high this year, A bull market is far away?

4 nov 2019

Today, the a50 futures index of Singapore hit a new high in 2019, which represents the Chinese blue chip stocks. In the past four years, the index has been showing strong characteristics. A big convergence triangle has reached the end, and if it breaks through 15000, it will form a breakthrough trend. We know that China is revamping A series of financial regulations to attract international capital inflows, and the continued increase in flows through Hong Kong over the past few months shows that foreign investors are bullish on China's a-shares.

So what is the logic? After China's economic stagnation, actually I have been calling for everyone to see how A shares, when economic recession period, the theory of capital outflow is inevitable, but China is not the same, because there are all kinds of control measures, leading to the freedom of capital flows to the developed market, so in the case of domestic capital couldn't go out, can only choose A relatively safe investments, and the economic recession period, the influence of real estate investment and industrial investment suffered more serious, and as A light assets of the securities investment become relatively flexible choice. So from this point of view, A shares are more suitable for the current capital choice. And we also know that after Japan signed the plaza accord with the United States, the economy suffered a major blow, but the nikkei index has a bull trend, this is the characteristics of securities assets.

But on the other hand, China still has A lot of room for reform. Financial reform is one of the most important targets. Therefore, in the context that the Chinese government is in urgent need of capital securitization, a-shares naturally become the first choice for investment.

So I believe in the next 3-5 years, A shares will show A slow bull trend, but this slow bull trend will have several characteristics

1, differentiation is more and more obvious, garbage shares will lie down on the floor, and will not appear before the reincarnation phenomenon, do not hope garbage shares pheasant into phoenix, because the board has implemented the quasi-registration system, shell resource value dropped significantly

2, innovation is the main melody, with the deepening of China's economic reform, technology innovation is an inevitable trend, whether import substitution, or the industrial upgrading, has a huge space, and 5 g based on Internet of things will be in 10 years to become the foundation of the global economy increase, China will not give up this chance, relevant industry faces huge opportunity

3. The correct exchange rate of capital will be greatly improved, and the quality of Chinese listed companies will also be greatly improved. With the entry of international capital, the standard level will be continuously improved, and the mode of forcing reform will be more obvious

Above all, I think the a-share market is full of opportunities, we should grasp well, look at the past four years, although after the crash, A series of deleveraging brings the pain, but we also see the a-share phenomenon is more and more good, maotai such soft gold value recognition is A good phenomenon, and apple so great company, also can appear in China.