My Fintech Empire

The SGX 50 index opened slightly higher in the morning and went up in a volatile manner during the session. More than 260 stocks listed on the SGX market were all in the red, and none of them fell.

At around 13:33 in the afternoon, the NSE 50 Index's increase expanded to 5 percentage points, successfully breaking through the previous high of 1575.05 points and setting a new all-time high, and investors were excited.

No one expected that the NSE 50 Index would plummet by 1,156 points before the market emerged, and they did not expect that it would hit a record high again in such a short period of time.

As time went by, towards the last forty minutes of the trading session, the New Securities 50 Index continued to maintain its upward momentum, and stood at the 1,600-point mark around 14:43, finally breaking out of a massive surge in volume. Changyang line.

As of closing, the three major A-share trading markets all closed sharply today. The Shanghai Composite Index surged +3.34% to 2916.62 points, with a turnover of 236.5 billion; the Shenzhen Component Index surged +4.00% to 10159.93 points, with a turnover of 395 billion; New The SSE 50 Index surged +6.75% to close at 1,603.38 points, with a turnover of 237.3 billion.

The three major markets experienced surges in volume, with a total daily turnover of 868.8 billion that day.

The SGX market is at its peak. From the historical low of 780.15 points to today's close, the SGX 50 index has increased by a cumulative range of +105.52%, doubling in just about four months.

Even from an annual perspective, the SGX 50 Index has a range increase of +60.33% during the year. The SGX’s bull market is not only far ahead in this year’s A-share market, but also among the best in major global stock markets this year.

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Meditation in the villa.

Tian Jiayi was staying with Fang Hong. She said: "With the SGX 50 index hitting a new record high, the market once again called on SGX to launch more indexes to meet the market's investment needs. Today, SGX We also held a meeting to discuss this matter.”

Since the first batch of companies were registered and listed on the SGX in January this year, it has maintained a double-digit issuance rate every week since then, setting a new record for the issuance speed of new shares in the A-share market.

At present, the number of companies that have completed registration and listing has reached 267, and 22 new stocks were registered and listed this week.

Even when the market plummeted some time ago, it did not affect the progress of new stock listings. Every week, it maintained double-digit efficiency and accelerated expansion and listing.

If this rate continues, the market generally predicts that it is certain that the number of companies registered and listed on the SGX will exceed 500 in 2016.

With the rapid expansion of listed companies on the SGX market, investors have frequently called on the SGX to launch more and richer indices to meet the investment needs of the market in different dimensions. Currently, the SGX has only one SGX 50 index, whose constituent stocks are all super heavyweight stocks worth hundreds of billions, and it has not yet collected 50 stocks.

The SGX 50 Index is undoubtedly the absolute face of the SGX. This is the broad market index of the SGX.

But at the same time, as the stock pool on the market becomes larger and larger, there are more small-cap growth stocks on the SGX. These listed stocks generally have a market capitalization of several billion, and those exceeding tens of billions are now available. not much.

Since it is basically difficult for these listed stocks to enter the NSE 50 Index, most small and medium-sized investors who want to invest in these stocks can only stare blankly.

The vast majority of ordinary retail investors cannot buy small tickets because they cannot meet the investment access threshold of the SGX. By investing in on-exchange ETFs, they can only buy ETF funds that track the SGX 50 Index, which leads to the SGX 50 Index. The influx of large amounts of funds in turn promoted the rapid expansion of the bubble in the New Securities 50 Index.

Many investment institutions in the industry believe that this will further aggravate market volatility, and therefore continue to call on the SGX to launch some small-cap stock indices and correspondingly launch small-cap index ETFs, so as to satisfy investors' demand for small-cap growth stocks. Investment demand can also bring sufficient liquidity to these small-cap stocks, and can also prevent excessive concentration of funds from pouring into the constituent stocks of the NSE 50 Index.

Finally, Fang Hongyan asked briefly and comprehensively: "What does SGX think of this?"

Tian Jiayi replied: "I have read the minutes of today's meeting of the SGX. Generally speaking, it is in favor of the market's call. Launching more indexes and corresponding ETFs can take into account each other, achieve a reasonable diversion of funds, and be more effective. It is conducive to the long-term healthy development of the market."

Fang Hong smiled and said: "So, you are more inclined to this."

Tian Jiayi was noncommittal.

Now so many investors are pouring into the SGX market, but because there are too few investment varieties to choose from, they basically buy the SGX 50 index with their eyes closed. Retail investors who can invest in SGX stocks are all A-shares. The market currently does not exceed 2 million.

This is the reason why the funds of the five NSE 50 indexes can exceed RMB 700-800 billion in such a short period of time. And looking at this trend, the total funds of these five ETFs will definitely exceed RMB 1 trillion within the year.

Such a huge amount of capital has driven its stock price to rise rapidly. Although the constituent stocks of the NSE 50 Index are all good companies, the bubble inflates too fast and the value growth may not be able to keep up.

The launch of some indexes for small and medium-cap stocks, and then the launch of corresponding ETFs to enrich market investment varieties, can also have the effect of diverting funds, slow down the bubble expansion speed of the NSE 50 index, and also bring more abundant funds to other listed targets. fluidity.

At this time, Fang Hong asked again: "Based on the latest closing price of the four major A-share stock indexes, what is the average price-to-earnings ratio?"

Tian Jiayi immediately replied: "The average price-to-earnings ratio of the NSE 50 Index is 70 times, the Shanghai Stock Exchange Index is 14.5 times, the Shenzhen Component Index is 38 times, and the GEM Index is 71 times. The NSE 50 Index still lacks 15 stocks to reach 50 constituent stocks. So strictly speaking it should be about 60 times."

Fang Hong couldn't help but joked: "It has not yet caught up with the GEM P/E ratio, which has been cut in half. The bubble in the NSE 50 Index is smaller than I expected."

The current price-to-earnings ratio of the GEM index is still 71 times after being cut in half. At the peak of the bull market last year, its price-to-earnings ratio reached an outrageous 133 times or more.

After hearing what he said, Tian Jiayi immediately said: "There is no meaning of benchmarking between the two, right? The bubble blown up by the GEM has no possibility of being filled. To put it bluntly, it is purely hype. Even if it is cut in half, it has no value. It is still worthless. It is not suitable to benchmark against the Shanghai and Shenzhen main board indexes. It is not on the same track, but it is more suitable to benchmark against the Nasdaq 100 Index of US stocks. The current price-to-earnings ratio of the Nasdaq 100 is about 40 times."

Obviously, Fang Hong just said casually. Of course he knows that benchmarking the SGX 50 Index with the GEM is meaningless. The listed companies on the SGX are all good companies that he or the professional advisory team of Qunxing have checked for listing, especially this year. These listed companies can basically fill the bubble through value growth in the future, especially for those listed subsidiaries of large weight groups.

Looking at the listed companies on the GEM next door, more than 90% of the listed companies are unlikely to fill the bubble that has been blown up.

In other words, the tickets on the GEM that reached the historical high last year were basically the top of the universe. They can never break through again. No matter how long the time period is, it will be useless. And some of the tickets that have reached the top on the SGX are only staged. The top, as long as the time period is extended, is even a periodic bottom.

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