Reflection On The Third Stock Market Crash: Market Participants Have Undergone Subtle Changes.

Since the beginning of the year, the biggest decline of Shanghai Composite Index, small and medium-sized board and gem has reached 19.9%, 25.2% and 28.6% respectively. The reduction of large shareholders, the depreciation of RMB and the fusing mechanism have become the three major culprits in the market crash.

Of course, beyond the collapse, it is worth reflecting that from 615 to 818, and then to the beginning of 16, it is only half a year.

In the past three storms, what are the underlying reasons? In our view, this is closely related to the changes in the market participants. The proportion of absolute income investors has increased substantially, and once the market has withdrawn, the sales decline has expanded rapidly.

Change 1: private equity fund accelerates.

Before the bull market started in 14 years, the private equity fund was still the supporting role of the two market. In September 14, private equity funds (securities, data from the Fund Industry Association registration, excluding the private placement of the whole market) had a management scale of about 440 billion, compared with the scale of the public offering fund (stock + mixed type) at 3:10.

But with the fermentation of the bull market in 14 years and the madness of the bull market for 15 years, private funds have sprung up like bamboo shoots after the rain.

In April of 15, the scale of private equity fund management exceeded 1 trillion for the first time, reaching 39% of the scale of public offering fund (stock + mixed).

After the 811 disaster, although the share of the public fund dropped sharply, the private placement fund was relatively stable. Since September, the scale of private equity fund management has stabilized at about 1 trillion and 700 billion, and the scale of the private equity fund (stock + mixed type) has reached to 7:10 at the rate of 1 trillion and 700 billion.

But from the perspective of the nature of private fund's funds, the pursuit of absolute income is the main reason. Therefore, once the market is in trouble, the funds will often take the lead out of the net value protection.

Change two: the scale of public fund accounts increased.

More flexible.

For the public offering, the traditional relative income oriented mode is also changing.

First of all, the scale of the special account has been speeded up. In June 13, the scale of the special account was about 968 billion 200 million, which was 38.5% of the scale of the public offering. As of September 15, the scale of the special account has risen to 32591 billion, reaching 48.7% of the scale of the public offering. This part of the fund also takes the absolute income as the benchmark for evaluation, and the investment behavior is similar to the private fund.

Two, with the "public offering of securities investment fund operation and management measures" (SFC Order No. 104th) came into force in 15 August 8th, according to the "management measures", the lower limit of equity fund stock investment increased from 60% to 80%. Most of the funds changed their flexible stock allocation funds to flexible allocation, considering the location and investment strategy, corresponding to the stock positions changed from 80%-100% to 0-95%, and the interval expanded significantly.

Change three:

Become potential high pressure tipping point.

Before the 615 disaster, the A share and the off site financing account for 7.2% of the market value, accounting for about 15% of the market value of free circulation, much higher than that of the mature market.

Although the leverage ratio has been reduced after continuous deleveraging, the current floor financing balance is about 10239 billion, and over the counter financing is expected to be over 200 billion. Financing accounts for 3.5% of the circulation market value, accounting for 7% of the free circulation market value, while the average overseas level is only 2%.

These leveraged funds will become amplifiers when the market falls.

Reduce the new rules and fuse to suspend and stabilize market confidence.

In the beginning of the year, a big incentive for the market to fall was the concern about the lifting of the ban on major shareholders. However, in January 7th, the SFC first issued a number of regulations on the large shareholders and directors' holdings of shares of listed companies. It clearly stated that the total number of large shareholders (holding more than 5% of shareholders) in the three month period through the stock exchange's centralized bidding paction should not exceed 1% of the total shares of the company.

Then, in January 9th, the Shanghai Stock Exchange and the Shenzhen Stock Exchange issued a notice on the implementation of the relevant provisions of the "large number of shareholders of listed companies and the regulations on the reduction of shares held by the directors", which made up for the loopholes in the reduction of large pactions. In January 13th, the Shanghai and Shenzhen Stock Exchange made a deep voice at night, indicating that they would strictly control the reduction of major shareholders and take special measures to increase supervision.

And since the beginning of this year, two major shareholders of more than 100 listed companies have made commitments to reduce their holdings and further stabilize their expectations.

Moreover, the suspension of the fusing system in January 8th will also help the market return to normal trading.