My Fintech Empire

After hearing this supplementary provision, Fang Hong nodded in approval and said: "This can be done. It fills a loophole. Everyone unanimously agrees. I also agree to fill this provision."

He also agreed, so basically there is no suspense if this supplement is added.

Once the new regulations are officially implemented, in the future, issuers who want to register for listing will have to provide the market with a valuation quote that they think is reasonable for their company.

Some people may think that if the issuer is allowed to make its own valuation, then the price must be higher. But the problem is that once the issuer is found to have made a fraud or violated regulations, and then the company is forced to delist, then it must be based on the valuation given by the issuer. Worth buying back shares from public investors.

Under this regulation, if an issuer wants to overestimate its company's valuation, but it knows its own company's situation best, it will not dare to make a blind valuation. Once it gives itself an unreasonably high valuation, it will inevitably cause problems afterwards. Being liquidated will result in bankruptcy.

Tian Jiayi thought for a while and said: "Just to add to this regulation, if the issuer itself reports a very low valuation for its company, will the market still be willing to give the company a high valuation?"

Hearing this, Fang Hong smiled and said: "Don't go to extremes. Political economics is not perfect, and market economics is not without merit. It still has the ability to discover prices."

Fang Hong added: "The company itself is really outstanding. If the valuation given by the issuer is low, the market can also find the price. If the valuation is low, it will rise; vice versa. If the company itself is not good, the valuation given by the issuer will The good thing about this regulation is that it cultivates a rational understanding of valuation among corporate issuers and investors and promotes the healthy development of the capital market.”

The fundamental question is fairness, fairness, or just fairness.

Under such an operating mechanism, if the company itself is not a good product, the issuer will not dare to overestimate it, because it will lead to bankruptcy; if the company itself is very good, the issuer cannot underestimate it too much, because the valuation report is too high. If it is too low, when raising the same amount of funds, the issuer will either provide more equity or take less money, and it will definitely not be happy with a transaction that is obviously a loss.

All in all, as the rule maker of this place, set the rules well and eliminate loopholes. The rest is left to the market to find the price and reflect it on the asset price.

…

The next day, Monday, February 11th.

The first trading day of the Lunar New Year has arrived as expected, and today the three major A-share indexes collectively rose sharply.

Among them, the almost forgotten ChiNext Index surged as high as +8.52% today, returning to the 1,000-point mark. Multiple sectors rose during the session, and theme stocks performed very actively, with a 100-share daily limit trend.

The GEM Index has also been hotly discussed by big A investors.

In Fang Hong's previous life, the GEM index reached its lowest point at the end of 2018 at 1,184 points. However, this index fell below 800 points two years ago, which is quite tragic. The entire GEM index's trading volume throughout the day was 1,184 points. It maintains around 20 billion, sometimes even less than 20 billion, and almost no one is playing.

Today's surge of more than 8 points is due to the wild rumors yesterday that the two cities next door are also going to issue new delisting regulations.

Then a large number of stock investors were also confused, saying that they could not understand the logic of the two markets next door. Logically speaking, the news that went viral should be good for small businesses in the short term, and good for blue chips with good performance, although big blue chips are also there. However, the prices of small and medium-sized enterprises have obviously skyrocketed even more violently and crazily.

Both the GEM Index and the Small and Medium-sized Enterprise Board Index soared to an increase of 8 points.

This is all driven by the news that is currently going viral. It is rumored that the new delisting regulations require delisting compensation and repurchase based on fair value assessment by a third-party agency.

In the past three years since the listing of the SGX, especially since 2018, the decline of small and medium-sized enterprises has really been miserable. The GEM index once fell below the initial value of 1,000 points, which shows how miserable it is.

And with the news that if the delisted stocks are repurchased according to the fair value assessment of a third-party agency, many stocks on the GEM next door are now seriously oversold.

For example, there is a GEM stock with a current market value of 1.6 billion. However, if this company is delisted and evaluated according to its fair value, it will actually be worth 3 billion. If the stock is bought at the current market price, it will be stable. Earning more than 80 points of profit is simply giving away money.

Therefore, similar companies were heavily bought by funds today, and many seriously oversold stocks have reached their daily limit.

But there is a very critical question, and that is whether the performance of the stocks of the small and medium-sized companies next door are fraudulent? Is it an inflated performance? Is it whitewashing the performance?

For example, for a GEM stock with a current market value of 1.6 billion, the figure of 3 billion based on fair value assessment is based on the premise that the company's performance statement is waterless. If the performance was inflated and the statements were whitewashed, the company would have been hollowed out long ago, and the fair value derived from the last evaluation was only 10 million.

The good guy lurked in when the market value was 1.6 billion, and then he directly lost -99.37%%. After buying it for 1 million, he only had 6,300 yuan left.

But the actual situation is that the vast majority of small and medium-sized retail investors do not have the ability to distinguish performance, and do not know whether the performance is a true reflection. They only think that there is an opportunity to pick up money in the small and medium-sized startups next door, and they can pick up money by bending down.

So many people came to grab the stocks. Even if some people think there are pitfalls and risks, they think that it has fallen so much, how much lower can it fall? And they think that they may not be the one to take the last baton.

In fact, this rumor is not a coincidence.

Some "big brothers" are really trapped. There is no liquidity and they can't get out of the loss. The small and medium-sized start-ups next door are almost H shares. That is, penny stocks have begun to appear. Just a few hundred thousand funds can smash a pit.

This really makes some "big brothers" who are trapped so badly anxious. They have to find a way to get out of the trap as soon as possible. After thinking about it, they saw the rumors about the new delisting rules from the SGX market, which made these "big brothers" find ideas. Seeing that the stockholders are so excited and supportive of this matter, they have an idea.

In this way, this rumor came out, creating an opportunity to pick up money to attract funds to come and grab shares, and now the time node has reached the pre-disclosure of the annual report, and with a wave of annual report hype, they can make a fortune and get out of the trap quickly.

Those financial rentiers also know that if they delay any further, they will really have no chance to get out of the trap.

They also know that even if Fang Hong sees through it, he will not come to mess with them, because the two sides have reached a tacit consensus since that time in the middle lane, you play yours and don't mess with me, I play mine and I won't mess with you.

The higher-ups also told Fang Hong not to go to the next door to get involved, and the key is to fix the SGX market, and Fang Hong has indeed not taken the initiative to provoke them since then as long as those people don't come to provoke them, and there is indeed no conflict on the surface.

But Fang Hong also quietly set up a network overseas to dig pits, waiting for these people to make money before cutting them.

Judging from today's market conditions, there are indeed many retail investors who have jumped in. Retail investors are interested in their profits, and they are interested in the principal of retail investors.

Now the retail investors who follow up are likely to make money, but when a wave of hype rises, there will always be someone to take the last baton and pay for the people in front.

Fang Hong also chose to watch from the sidelines. There was nothing much to say about the retail investors who were cut. They were not satisfied with participating in ETFs in the SGX market. They would not deserve sympathy if they stepped on a landmine.

As the market closed, the three major A-share trading markets closed with a big rise on the first trading day after the holiday.

The SGX 50 Index hit a new historical high and reached the 4,700-point integer mark in one fell swoop. It closed up +1.70% after the market closed at 4,705.55 points; the Shanghai Composite Index closed up +1.36% at 2,653.90 points, and the Shenzhen Component Index rose +3.06% to 7,919.05 points.

The total trading volume of the three major markets increased to 1,186.2 billion, of which the SGX market had a full-day trading volume of 866.3 billion, which was a larger volume than the previous trading day.

…