So, why is this happening?
In fact, the downturn in the stock market is not caused by the bad economy, but the structural problems of A shares themselves.
Next, let's analyze the three main reasons for this situation.
1. At present, our A shares have just been established for about 30 years. At the beginning, due to lack of experience or supervision, many listed companies listed at too high an issue price. For example, PetroChina, which we are familiar with, was wrongly priced at the time of listing, which led to the stock price falling all the way after listing.
From 45 yuan, which was listed, to 4 yuan now, the share price has fallen by more than 90%.
As of June 2020, the lowest price of 12 hit a record low of 4.22 yuan, with no intention of stopping falling.
The share price of this trillion-dollar super-large-cap stock plummeted by 90%, which was a huge drag on the index.
2. Has anyone found that many companies did well before listing, making money every year, but losing money every year after listing?
Because there was something wrong with our A-share mechanism before, we went public, but we didn't withdraw from the market. In other words, like the brave, you can only enter but not leave.
In fact, the positioning of A shares in the past was to solve the financing problem of enterprises, not to create profits.
After many listed companies go public, as long as they release a few good news casually, they can boost the stock price. It is much faster to make money by these things than to do a good job in corporate performance. Easy money and hard money, the vast majority chose easy money.
If all markets are as profitable as Kweichow Moutai, the index will not be like this.
However, contrary to expectations, many listed companies lack the ability to create their own profits, and listing is just to circle money.
What's more, some enterprises frequently make financial fraud and cash out at a high level, which is also the reason why the stock market does not rise.
3. Remember the big bull market in 2007? The exchange is crowded, and the aunts who buy food on the street don't buy food. They are all watching the market. The uncle who sells meat is covered in flies and doesn't catch up, rushing to see the K line. Even the aunt who sweeps the street relies on the big tree to study stocks. It was in this environment that the market was pulled to the historical high point of A-share 6 124.04, but the economy at that time was not enough to support such a high point. Finally, the stock market plummeted. The huge bubble burst.
It takes a long time to digest this burst bubble.