Article/Ai Jingwei, columnist of Sina Financial Opinion Leader (WeChat official account kopleader)
I have no doubt that A-share repurchases can continue to hit new highs and A-share can also rebound by the way under the stimulus of 10 times of money circle today and tomorrow. But the problem is that the market bottom is always ground out. The market bottom is always born of despair. After a rebound, it is more painful.
Thanks to the joint document issued by the CSRC, the Ministry of Finance and the State owned Assets Supervision and Administration Commission to support the buyback last Friday night, the market has risen for two days in a row this week, and even the sharp fall of the US stock market on Monday night was just a tremor at the opening of the market.
In late October, the Company Law was amended to include the provisions on the situation of share buyback by listed companies; 2、 Properly simplify the decision-making process of share repurchase; 3、 Supplement the regulatory requirements for share repurchase of listed companies.
On November 9, the CSRC, the Ministry of Finance and the State owned Assets Supervision and Administration Commission jointly issued the Opinions on Supporting Repurchase, and the repurchase reached its climax. On the evening of November 11, more than ten listed companies issued repurchase plans.
However, it has to be said that the buyback opinion may also generate goblins. Let's talk about the details of the document.
1. We will continue to support listed companies to raise funds for repurchasing their own shares by issuing preferred shares, bonds and other means.
Question: Preferred stock and bond issuance are essentially financing in the form of creditor's rights, and then repurchase (buy back stocks from the secondary market). What kind of companies will do this? Buying back debt to boost stock price? If the borrowed money is not used for actual operation, do you want to "get out of the void and get into the real"?
2. Encourage the controlling shareholders and actual controllers of listed companies to actively increase their holdings of listed companies in combination with their own conditions, promote listed companies to buy back their shares, and provide financial support.
Question: This round of equity pledge crisis is precisely the problem of the capital chain of the controlling shareholders and actual controllers of most listed companies, which is more limited by the new regulations on shareholding reduction on April 27, 2016. It is too late to reduce shareholding. How many major shareholders are still able to buy back? Of course, "provide support in terms of funds" - is it necessary to encourage major shareholders to increase leverage?
3. If a listed company applies for refinancing after implementing share repurchase, and the financing scale does not exceed 10 times the total amount of share repurchase in the last 12 months, the time from the resolution date of the board of directors of this refinancing issue to the date when the funds raised in the previous time are in place is not limited by the financing interval, and priority support is given to such refinancing applications in the review.
Question: This is the most flawed and controversial one. In plain words, today you buy back 100 million yuan, and tomorrow you will be qualified to circle 1 billion yuan in the stock market.
In essence, the stock market is a financing market. It is normal to have listing and delisting, and it is normal to have financing and dividends. However, the number of dividend companies of A-share listed companies has been on the low side, and the dividend rate is on the low side. Now, in order to encourage repo, how can we promise more money in the future? There must be shrewd capital brokers planning this loophole, and there will definitely be no shortage of goblins!
In a word, the introduction of repo to stimulate stock prices can be seen from the painstaking efforts, but still can not escape the strange circle of "headache cures head, foot pain cures foot". For the short-term rebound of the stock market, the overdraft is the credit of the policy. It can be said that today, share repurchases are used to save the stock pledge crisis, but how many people realize that in 2015, major shareholders are encouraged to increase their holdings to save the stock pledge crisis?
So, even if the current equity pledge crisis has been resolved by repurchase, how can the subsequent refinancing pressure be resolved? Since 2017, the regulatory authorities have deliberately restricted refinancing and accelerated IPO, and now it is back to the original.
In fact, even if the refinancing pressure derived from repo is not yet there, the pressure of lifting the ban on fixed growth of more than 200 billion yuan from 2015 to 2017 may accelerate next!
I have no doubt that A-share repurchases can continue to hit new highs and A-share can also rebound by the way under the stimulus of 10 times of money circle today and tomorrow. But the problem is that the market bottom is always ground out. The market bottom is always born of despair. After a rebound, it is more painful.
(The author of this article introduces a researcher and participant in the financial market, who has successively served as the director of Finance and Quotient Department of First Finance and Economics, the chief content officer and director of a research institute of a NASDAQ listed financial institution, and has written Black Hole of Leverage, etc.)
