After a week of correction, the Shanghai Composite Index resumed its upward momentum, breaking through the 3,000-point integer mark on Tuesday, and market confidence has recovered. Recently, after the market fell below the 3,000-point integer mark, there was a round of shocks and bottoming out. On the one hand, I suggest that you should maintain confidence and patience, as long as you hold high-quality stocks or high-quality funds, you can wait patiently for the market to pick up, and 3,000 points will eventually be lost, which has been repeatedly proven by the experience of the past ten years. Although the Shanghai Composite Index has fallen below 3,000 points nearly 60 times in the past 17 years, it has stood above 3,000 points 60 times, and the time the market has been running below 3,000 points is much less than the time that the market has been running above 3,000 points. The room to fall below 3,000 is also much smaller than the room to rise above 3,000. Once it falls below 3000 points, some contrarian funds may enter the market to make a layout. On the other hand, I also actively call on the national team to increase its efforts to enter the market, not only to support the bottom, but also to pull up, completely reverse the downward trend of the market, and form an upward trend. Once the market forms an upward trend and the money-making effect increases, the willingness of over-the-counter funds to enter the market will gradually increase.
Now the market is not short of money, but lack of confidence. According to the data released by the central bank, from January to May, residents' deposits increased by 9 trillion yuan, and in the past three years, it has increased by 60 trillion yuan. In the past, the money-making effect of the real estate market was relatively strong, and the deposit moved often to the property market, but now the golden investment period of the real estate market has ended, and there has been a decline in transaction volume and a decline in housing prices, so it is unlikely that residents' savings will be transferred to the property market at this time, and the capital market is expected to become the next reservoir to absorb excessive liquidity, and become the market where residents' deposits move in. But to kick off the process, it takes a lot of money to reverse the market's decline, which can create a money-making effect and boost investor confidence.
Recently, the China Securities Regulatory Commission (CSRC) has carried out a special investigation on further deepening the reform of the capital market in an all-round way. Wu Qing, chairman of the China Securities Regulatory Commission, and other team members have successively conducted research and research on further deepening the reform of the capital market in Beijing, Shanghai, Guangzhou and Shenzhen, and fully listened to the opinions of all parties. In the survey, everyone agreed that promoting the high-quality development of the capital market is of great significance for supporting high-level scientific and technological self-reliance and self-reliance, and developing new quality productivity. All parties are full of confidence that the mainland's economy will continue to maintain stability and improvement, and that the capital market will develop steadily and healthily. To adapt to the new situation and new requirements, we must closely focus on promoting Chinese-style modernization, adhere to the main line of strengthening supervision, preventing risks, and promoting high-quality development, adhere to goal-oriented and problem-oriented, make good use of the key measures of reform, adhere to the direction of marketization and rule of law, further break the stuck points that restrict the high-quality development of the capital market, and continue to improve the quality and efficiency of the capital market in serving the real economy.
To further deepen the reform of the capital market in an all-round way, it is necessary to focus on serving scientific and technological innovation and the development of new productive forces, and accelerate the construction of a full-chain market service system and related institutional mechanisms that are compatible with the direction. Adhere to the priority of quality, strictly control the access to IPOs, improve the accurate identification mechanism of technology-based enterprises, coordinate the balance of the primary and secondary markets, make greater efforts to promote the entry of medium and long-term funds into the market, strive to enhance the internal stability of the capital market, adhere to strict supervision in accordance with the law, further enhance the adaptability and pertinence of securities lending, quantification and delisting supervision, severely crack down on serious violations of laws and regulations such as financial fraud and fraudulent issuance, further improve the investor compensation and relief mechanism, and strengthen investor protection in the process of delisting. Take multiple measures to stimulate the vitality of the M&A and restructuring market, support listed companies to focus on better and stronger main businesses, carry out absorption and merger, industrial integration, vigorously improve the quality of listed companies, and further promote the smooth cycle of "fundraising, investment, management and withdrawal" of private equity venture capital funds, guide enterprises to invest early, small, long-term, and hard technology, tighten and consolidate the gatekeeper responsibilities of intermediaries, and accelerate the improvement of professional service capabilities.
The CSRC's measures to comprehensively deepen the reform have implemented the requirements of the new "National Nine Articles", which is expected to boost market confidence and promote the stabilization and recovery of the capital market. Recently released economic data shows that the current economy has begun to recover, but the recovery is not large, and more policies are needed to stimulate domestic demand, create jobs, and increase residents' incomes, so as to boost consumption and drive further economic recovery.
The PMI is a leading indicator of economic growth. The PMI data for June has been released, and the mainland manufacturing PMI in June was 49.5%, the same as the previous month, representing that the economic prosperity still needs to be improved, which requires more "big moves" to boost the performance of the economy. From the perspective of the changes in the sub-index, the production side has increased steadily, the growth of new drivers has accelerated, the vitality of micro subjects has improved, the pressure on raw material costs has fallen in the short term, and the overall economic operation is stable.
In June, the mainland's manufacturing production activities maintained a steady and increasing momentum, with the production index at 50.6%, still remaining in the expansion range. The economic policies launched in the early stage have been gradually implemented, which has a good role in promoting the expansion of production by enterprises, and some industries have better orders to support the overall production activities of the manufacturing industry. The new momentum accelerated growth, the equipment manufacturing PMI in June was 51%, up 0.3 percentage points from the previous month, and its production index and new orders index rebounded from the previous month, rising to more than 53% and 52% respectively. The high-tech manufacturing PMI was 52.3%, up 1.6 percentage points from the previous month, and the production index was close to 54%, up more than one percentage point from the previous month, and the new orders index was 53%, up nearly two percentage points from the previous month.
In June, the business activity index remained above 50%, and the non-manufacturing business activity index and the composite PMI output index were both above 50%, in the expansion range, which also shows that the non-manufacturing business activity index remained in an expansionary state. In June, the mainland's non-manufacturing business activity index and composite PMI output index were both 50.5%, down 0.6 and 0.5 percentage points respectively from the previous month.
From the perspective of output, the mainland's economy has maintained expansion on the whole, but the foundation for sustained recovery still needs to be consolidated, enterprise production has maintained expansion, and the demand in the manufacturing market is still insufficient. In the second half of the year, the policy of stabilizing economic growth is expected to be further strengthened, especially in terms of stimulating investment and boosting consumption, and more policy support is needed to boost the investment confidence of enterprises and residents, and the foundation of economic growth is also expected to be more solid. In the second half of the year, the mainland's economy is expected to accelerate its recovery, which will also bring opportunities for the capital market to rebound, and the performance of the capital market in the second half of the year is expected to be better than that of the first half of the year, and the money-making effect is also expected to gradually increase.
(The author is the chief economist and fund manager of Qianhai Open Source Fund)