Investors Need To Be Cautious Of Low Price Earnings Ratio Traps For A Shares.

Shanghai Negotiable securities As of May 5th, the average price earnings ratio of the Shanghai stock market fell 10 times to 9.69 times, according to the data of the exchange. According to the Shenzhen stock exchange data, as of May 6th, the overall market price earnings ratio of Shenzhen stock market was 24.41 times, of which 15.69 times the Shenzhen main board, 32.14 times of the small and medium board, and 53.48 times of the growth enterprise market.

P / E, that is shares The ratio of price to earnings per share. That is to say, there are several possible patterns leading to a sharp decline in the overall market earnings ratio of the market: first, the stock price has dropped sharply under the premise that the overall performance of the listed companies has remained stable; secondly, the overall performance of the listed companies has been greatly improved in the condition of stable stock prices; the third is the fall in share prices and the performance improvement of the listed companies.

According to authoritative data, the overall net profit in 2013 increased by 9.54% over the same year. Among them, the overall net profit of Shenzhen stock market increased by 17.34%, the growth of medium and small board increased by 5.18%, and the growth enterprise board grew by 10.48%. Another data statistics, from 2010 to 2013, the A share market performance is not optimistic. Among them, 2010 fell 14% in the whole year, and in 2011, it achieved an annual decline of 21%. Last year, the A share market ended in a fall, with a year-round fall of 6.75%. Entering the 2014, the performance of the A share market is still not satisfactory.

Obviously, the decline of the average share price of listed companies is the main reason for the overall price earnings ratio of the A share market slipping. At present, the Shanghai stock market's average price earnings ratio has fallen below 10 times, which is basically in line with the bottom line of investment value in mature foreign markets. But the low P / E index is a piece of pie on the surface. Actually, there are traps in one trap after another.

First, A share market The situation of rising and falling is no longer in existence. Low price earnings ratio stocks are not subject to financial considerations. There is no denying that the A share market is essentially different from the mature market abroad. The former pays more attention to the following effect of capital. No matter how the quality of the listed companies is, as long as there is capital to speculated, there will be speculation. On the contrary, foreign mature markets emphasize value investing, and price speculators seldom have a good ending. In addition, in foreign mature markets, especially harsh manipulation of stock prices, insider information and other bad behavior has been severely punished. Therefore, under the market environment with high cost of violation, there will not be any confusion in the A share market.

In the past second, tenth years, the market value of stock market has expanded sharply, and the reference value of P / E has shrunk dramatically. Today, the market value of the Shanghai and Shenzhen stock market has exceeded 15 trillion. However, the new liquidity has not increased significantly. In the past few years, the expansion of public offering funds has lagged far behind the expansion of market circulation market value. Moreover, as heavyweight large enterprises are listed, their leveraging effect on the market can not be ignored. At present, the top 20 listed companies in the Shanghai and Shenzhen market capitalization are enough to have a huge impact on the index. Thus, in a market environment where supply and demand are seriously unbalanced, the reference meaning of P / E is not obvious.

Third, the unreasonable market system has completely changed the way of playing games. In the past, the A share market basically showed a pattern of rising and falling. However, with the introduction of short selling tools such as stock index futures and margin trading, large capital institutions have completely manipulated the market by virtue of capital advantages and information superiority. In the past, both institutional and retail investors needed to adopt a one-way strategy to gain profits. Today, the game has changed. Large capital institutions can manipulate indices flexibly by means of multiple arbitrage tools, not limited to one-way operation mode. On the contrary, small and medium-sized investors, restricted by the threshold of funds, can only achieve earnings by doing more than one way.

Fourth, risk-free interest rates soared. equity market The risk premium is obviously lagging behind. In the past few years, the risk-free interest rate of the society has been at a high level, and all kinds of funds have been looking for investment channels with higher return on investment. Faced with the rapid development of various financial platforms, A shares are facing unprecedented pressure of fund diversion.