On April 12, the "Several Opinions of the State Council on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market" (hereinafter referred to as the "Opinions") was officially released. This is the third "National Nine Articles" of China's capital market, and it is also the second guiding document for the capital market issued by the State Council after the two editions of the "National Nine Articles" in 2004 and 2014.
From 1990 to 2024, China's capital market has been turbulent for more than 30 years, and all the "National Nine Articles" have played the role of outline and leader, although they carry different tasks and missions in different eras, but they are all committed to solving the core problems of the capital market and leading the healthy development of the market.
At present, it is a critical period for the mainland to build a financial power, and the release of the new "National Nine Articles" after 10 years depicts a roadmap for the high-quality development of China's capital market from the aspects of investor protection, quality of listed companies, development of industry institutions, regulatory capabilities and governance system construction.
So, what is the difference between the new "Nine Articles" and the previous two editions of the "Nine Articles" and how should we interpret them?
01 What is the difference from the previous two editions?
Since the turn of the millennium, the State Council has issued the "National Nine Measures" every 10 years to create "tailor-made" policy guidelines for the capital market.
On January 31, 2004, the State Council promulgated the first epoch-making "National Nine Articles" in the history of A-shares, "Several Opinions on Promoting the Reform, Opening-up and Stable Development of the Capital Market".
On May 9, 2014, the second "National Nine Articles" - "Several Opinions on Further Promoting the Healthy Development of the Capital Market" was released, the core of which is to expand the two-way opening of the market, encourage mergers and acquisitions, mixed ownership, and relax the approval of private placements, and put forward a series of measures aimed at improving the financial structure, promoting the coordinated development of direct financing and indirect financing, and laying the foundation for the subsequent registration system.
The third "National Nine Articles" issued this time is called "Several Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market", and among the nine parts of the opinions, words such as "strict", "high quality", "development" and "supervision" appear quite frequently.
Compared with the previous two editions of the "National Nine Articles", the differences between the new "National Nine Articles" mainly lie in two aspects:
From the perspective of the pattern, the new "National Nine Articles" emphasize the "political and people's" direction of the capital market work, draw a blueprint for the high-quality development of the market, point out the future development direction of the capital market, and basically form an overall framework for the high-quality development of the capital market within 5 years. The delisting system, the supervision of financial institutions, the supervision of market transactions, the entry of medium and long-term funds into the market, the deepening of reform and opening up, and the formation of a joint force for development are eight aspects.
From the content point of view, the new "National Nine Articles" are more accurate, the reform tentacles are deeper, and the coverage is wider, and the requirements are put forward in nine aspects, such as strictly controlling the issuance and listing access, strictly supervising listed companies, increasing the supervision of delisting, and vigorously promoting the entry of medium and long-term funds into the market, which reflects the great importance that the Party Central Committee and the State Council attach to the capital market.
From the point of view of emphasis, the first two times focused more on "enlarging the increment", and put forward measures such as speeding up listing, multi-level markets, private equity funds, and expanding the opening up and introduction of foreign capital, which was the creation and enrichment of China's modern capital market system;
In general, the overall requirements of the new "National Nine Measures" are based on strengthening supervision, preventing risks, and promoting high-quality development. The phased planning goals for the development of the next five years, 2035 and the middle of this century have made clear requirements for investor protection, improving the quality of listed companies, building securities, funds and futures institutions, and capital market governance. The deeper significance lies in promoting the construction of a financial power through the high-quality development of the capital market and serving the overall situation of Chinese-style modernization.
02 What is the impact of the previous "National Nine Articles" on the capital market?
In the view of analysts, the new "National Nine Articles" layout will not only change the ecology of the capital market, but also have a positive impact on the current trend of the A-share market.
Looking back on history, after the release of the first two "National Nine Articles", they have played a certain role in boosting the market.
On February 2, 2004, the first trading day after the release of the first "National Nine Articles", the Shanghai Composite Index rose by 2.08 percent, one month after the release of the Shanghai Composite Index rose by 6.07 percent, and two months after the release of the Shanghai Composite Index rose by 11.18 percent. Since then, the A-share market has experienced short-term shocks, but there are many views that it was the introduction of this policy that laid the foundation for the great bull market of 2006-2007.
In 2014, in the three months after the release of the second "National Nine Measures", the Shanghai Composite Index rose by 9.11%. There is also a view that this version of the "National Nine Articles" laid the foundation for the A-share bull market in 2015, and the Shanghai Composite Index pulled from more than 2,000 points to a maximum of more than 5,100 points.
"National Nine Measures" and the performance of market indices
Data source: Ping An Securities Research Institute
After more than two years of volatility, A-shares have been hovering around 3,000 points for a long time. What will be the impact of the new "National Nine Measures" on the A-share market?
Looking back at the historical trend, it is not difficult to find that after the release of the first two editions of the "National Nine Articles", although A-shares opened two more important rounds of bull market in history, the market did not immediately usher in a "big bull", but after a period of adjustment, it started to rise unilaterally.
In addition, judging from the market points of the previous two "National Nine Articles" releases, each time the National Nine Articles were released at a historical low in the market. It can be inferred that the market is indeed at a historical low at present, combined with the background of macroeconomic recovery, the new "National Nine Articles" or reshape the A-share valuation system, the medium and long-term performance of the market can be expected.
According to CICC's research view, leading companies in high-dividend-related fields and brokerage asset management may benefit from the release of the "National Nine Measures". The new "National Nine Articles" propose: strengthen the supervision of cash dividends of listed companies. For companies that have not paid dividends for many years or have a low proportion of dividends, major shareholders are restricted from reducing their holdings and risk warnings are implemented. The "Opinions" and supporting systems are expected to guide listed companies to strengthen dividends and increase the level and frequency of dividends.
In addition, remarkable progress has been made in the construction of first-class investment banks and investment institutions, which is one of the long-term directions of the new "National Nine Measures". In this document, it is also proposed to support leading institutions to enhance their core competitiveness through mergers and acquisitions, restructuring, organizational innovation, etc. Therefore, securities firms, asset management and other related fields are expected to achieve high-quality development in the introduction of the new "National Nine Articles" and the construction of a financial power.
Under the influence of the "National Nine Measures", stable value investment may become a long-term trend, or focus on sectors such as high dividends, stable free cash flow and ROE, state-owned enterprises, and exports.
03 The new "National Nine Articles" have a far-reaching impact on the capital market
Compared with the direct stimulus of the increase, the industry is more interested in the long-term and far-reaching impact of the "National Nine Articles" on the capital market.
The first is to strengthen supervision and risk prevention and control. To promote development, we should also prevent risks, implement the requirements of "enhancing the internal stability of the capital market" put forward in the government work report, and the new "National Nine Articles" clearly put forward to strengthen supervision and prevent risks, which means that the supervision of the capital market will be stricter and the market order will be more standardized in the future. The industry believes that the new "National Nine Measures" is conducive to solving the problems of imbalance between supply and demand in the A-share market, the low quality of the company, and the urgent need to improve the correct investment concept, and proposes institutional construction for creating a good investment and financing environment.
The second is to promote the high-quality development of the market. As the guiding document "1" in the current "1+N" policy system of the capital market, the new "National Nine Articles" mainly focus on the reform and long-term planning of the capital market system, requiring "the overall framework for the high-quality development of the capital market will be basically formed in the next five years", "the quality and structure of listed companies will be significantly optimized, and the strength and service capabilities of securities, funds and futures institutions will continue to be enhanced", and "the regulatory capacity and effectiveness of the capital market will be greatly improved", so as to promote the formation of the capital market to serve the overall situation of the national development strategy. The new "Nine Measures" will help enhance market transparency, standardize market order, promote the healthy development of the capital market, further enhance investor confidence, and promote the capital market to move in a more mature and stable direction.
The third is to protect the legitimate rights and interests of investors. The new "Nine Measures" adhere to the people-centered value orientation and more effectively protect the legitimate rights and interests of investors, especially small and medium-sized investors, which will help improve investors' sense of security and satisfaction.
Fourth, promote long-term capital into the market. Medium and long-term funds with standardized behavior, professional operation and strict management are the "ballast stone" and "stabilizer" of the capital market, and promoting the entry of medium and long-term funds into the market will help reduce market fluctuations, enhance the market's ability to resist risks, and guide the capital market to develop in a more mature and rational direction. In terms of promoting the entry of medium and long-term funds into the market and continuing to expand the long-term investment strength, the new "National Nine Articles" also have "new measures", which clearly put forward "optimizing the policy environment for equity investment of insurance funds, implementing and improving the performance evaluation methods of state-owned insurance companies, and better encouraging long-term equity investment"; improve the regulatory system for equity investment of insurance funds, and optimize the information disclosure requirements of listed insurance companies"; Improve the investment policies of the national social security fund and the basic pension insurance fund. Enhance the flexibility of enterprise annuity and personal pension investment".
The new "National Nine Measures" is not only a top-level plan for the development roadmap of China's capital market, but also a strong guide for the future direction of market supervision. As an important participant in the capital market, public funds are an important force to promote the high-quality development of the capital market, and play an important role in improving the quality of listed companies, serving the real economy, and maintaining the stability of the financial market.
Under the guidance of the "National Nine Articles", what should public funds do?
First of all, promote the entry of medium and long-term funds into the market and develop equity public funds. In the "National Nine Articles", it is proposed to vigorously promote the entry of medium and long-term funds into the market, vigorously develop equity public funds, and equity public offering products are about to usher in development opportunities. Under this guidance, the public fund should actively play the role of professional institutional investors in value discovery, financial support for the innovation and development of the real economy, timely grasp the needs of the market and investors, continue to launch innovative products, guide medium and long-term funds into the market, flow into the national strategic industries, serve the national strategy of self-improvement in science and technology, and contribute to the construction of a modern industrial system in the mainland.
Secondly, improve investment and research capabilities, innovate products and services, and do a good job of "stabilizer" and "ballast stone". The "Nine Articles" of the People's Republic of China propose to promote the development of indexed investment, comprehensively strengthen the investment and research capacity building of fund companies, and enrich the types of investable assets and investment portfolios of public funds, all of which put forward higher requirements for the investment and research capabilities and product innovation services of asset management institutions. How to efficiently screen out valuable investment targets in a broader and more active market and share the results of high-quality development of the capital market for investors requires us to maintain a respectful and humble attitude, do research seriously, continue to build investment capabilities, and repay investors' trust with excellent performance. Mutual funds should always pay attention to the needs of the market and investors, focus on market changes, keep up with regulatory policies and market trends, constantly innovate products, improve investment and research capabilities, and lay a product and business foundation for the high-quality and sustainable development of the capital market.
Third, counter-cyclical layout, rationally look at short-term market fluctuations, and do more "difficult but correct things". In the "National Nine Articles", it is proposed to change from scale-oriented to investor-oriented returns, revise the classification and evaluation system of fund managers, and urge the establishment of rational investment, value investment, and long-term investment concepts, which requires asset management institutions to put investors' sense of gain in a more important position. Under the guidance of regulation, Cathay Fund will continue to put the interests of its holders before the interests of the company. When the product layout is controlled, the timing and scale are controlled, the internal assessment and incentive mechanism is improved, the "reverse sales" is practiced, and the self-purchased equity funds and innovative investment accompaniment are used to stabilize investor confidence and contribute to the high-quality development of the industry when the market valuation is low.
Risk Warning
Views are for informational purposes only and do not constitute investment advice or commitment. The market is risky, and investors need to be cautious.