On January 8, 2022, GuorongSecuritiesCo-hosted the 26th (2022) China Capital Market Forum with the China Capital Market Research Institute of Renmin University of China.
Regarding China’s economic growth prospects and capital market development prospects in 2022, GuorongSecuritiesIn an interview with reporters, Chairman Hou Shoufa said that in the new stage of achieving high-quality development of China’s economy, China’s capital market is assuming a more important historical mission. Under the comprehensive registration system reform in China’s capital market, a change of the times with sufficient incremental spirit is taking place, and a new market ecology is gradually emerging. At present, after China’s capital market has successfully reformed the registration system of the Beijing Stock Exchange, the Science and Technology Innovation Board, and the Growth Enterprise Market, as well as the merger of the Shenzhen Stock Exchange’s main board and the small and medium-sized board, it is imperative for the entire market to realize the registration system. Regardless of policy support and the current market operation, the nature of the capital market industry will gradually become “technological”, and technology and innovation will become the mainstream industry for IPOs. At the same time, the capital market will step up efforts to guide capital regulations, prevent the brutal growth of capital, and set “traffic lights” for capital.
With the continuous deepening of the registration system reform and the development of the investment side of the capital market, Hou Shoufa stated that with the gradual implementation of the series of capital market reforms, investors’ attention to the capital market is increasing day by day. But overall, the biggest difference between China’s capital market and the relatively mature overseas capital markets is the “shortness of the bull and the longer the bear.” There are two main reasons for this situation: one is the relatively large proportion of retail investors in the domestic market, and the other is that many companies with relatively low long-term investment value flood the market.
Hou Shoufa believes that with the comprehensive reform of the registration system, the “retail-oriented” feature is gradually being reversed.On the one hand, public offerings in the past two yearsfundThe number of professional institutional investors has begun to increase substantially. On the other hand, it is more difficult for non-professional individual investors to obtain income. A large number of retail investors are being “forced” by the market to participate in the capital market through investment funds. This will definitely promote the capital market to a new stage of more rational value investment. In addition, with the implementation of the new delisting regulations, more companies that do not have long-term growth capabilities and investment value will be delisted. The capital market will achieve a better “metabolism” on the asset side, leaving more high-growth companies with investment value. So as to realize the characteristics of short-term speculative behaviors such as “speculation in small, poor, new, and speculative” on the investment side of the capital market.
How to treat the new concept, new ecology, and new pattern of the development of China’s capital market, Hou Shoufa elaborated on the following three aspects: entrepreneurs, capital markets and intermediaries:
For entrepreneurs, Hou Shoufa believes that after the capital market under the registration system opens the door to IPO, the capitalization and value of talents is the top priority. The high-quality development of the capital market can guide social capital into enterprises with real investment value to accumulate and form long-term capital value, thereby providing long-term equity value for enterprises to attract and retain truly outstanding talents.
As for the capital market itself, Hou Shoufa said that in addition to the more institutionalized capital market under the registration system, the opening of the value of the primary and secondary markets will also force institutional investors to form a longer-term value investment logic. At the same time, higher requirements are put forward for institutional investors, such as how deep the research of the industry is, how wide the resources in the industry are, and what incremental value empowerment it can bring to investment assets, etc.
For intermediary agencies, Hou Shoufa said that business opportunities in the era of capital market registration system have greatly increased, but their business models will have a subversive impact.BrokerageProject pricing and underwriting capabilities of investment banks will gradually become their core competitiveness. This requires brokerage investment banks to have a strong industry research team and institutional investor resources to support. The essence behind this is that intermediaries such as investment banks need to return to their original intention of serving the long-term value growth of enterprises.
(Source: Economic Observer Network)
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