After three months of IPO review restart, has the A-share inflection point come?

Guo Shiliang

2024-05-13 07:50Published in Guangdong financial commentator, financial columnist

  After more than three months, the IPO and refinancing review has been restarted, which means that the financing function of the A-share market has been restored again. Behind the resumption of IPO and refinancing review, investors may worry that the A-share rally is nearing the end, but in fact, to judge whether the A-share rally is over, it is not only to see whether the IPO and refinancing review is restarted, but to analyze from multiple aspects.

  Prior to the resumption of IPO and refinancing reviews, the last review meeting between the Shanghai Stock Exchange and the Shenzhen Stock Exchange was in early February. After a lapse of more than three months, the IPO and refinancing review of A-shares has been launched again, what is the reason behind it?

  The first reason is that financing is an important function of the stock market, and if a market only has financing and no investment function, it is unhealthy. In the same way, if a market is not financed, it is incomplete if it only has an investment function. The resumption of the financing function of the stock market is also a true portrayal of a complete stock market.

  The second reason is that the money-making effect of the stock market has gradually recovered, and the market index has returned to 3,100 points, which is also an important prerequisite for the resumption of IPO and refinancing review of A-shares.

  Some time ago, there was an irrational adjustment in the stock market, and since February 5, the financing and refinancing review of A-shares has also been in a state of temporary suspension. With the gradual improvement of the investment environment in the stock market, the money-making effect of the stock market has begun to gradually increase, which has also created a favorable market environment for the resumption of IPO and refinancing reviews.

  The third reason is that the demand for corporate financing and refinancing is strong, with as many as 522 companies under review, and it is necessary to speed up the resumption of IPO review and refinancing review in order to alleviate the pressure on the IPO dammed lake. If there are too many companies in the queue and the review cycle is prolonged, it will also lead to further increase the pressure on the IPO dammed lake.

  After three months, the resumption of IPO review indicates that this round of A-share rally has come to an end? The key depends on the pace of IPO issuance and the number of IPO issuances. Maintaining a balanced and reasonable level of issuance will also have a very limited impact on the market. Taking a step back, if the pace and number of IPOs exceed the market's capacity again, it will have a greater impact on the market, and the balanced development of investment and financing is the key to the healthy development of the stock market.

  With the resumption of IPO review, investors do not need to be pessimistic or over-interpret. After the market forms an upward trend, an upward inertia is often formed, and even if the pace of IPO issuance increases slightly during the period, it will not have too much impact on the market.

  After the irrational decline in the stock market in early February this year, the market's sensitivity to news such as the resumption of IPO review and the acceleration of IPO issuance will also increase significantly. Perhaps, behind the resumption of A-share IPO review, the investment sentiment of the market will be more or less affected, but the rise and fall of the stock market ultimately depends on the economic environment and the fundamentals and valuation level of listed companies.

  Financing is an important function of the stock market, and the investment function is also very important. Looking at the world's major mature stock markets, behind the long-term upward operation of the stock market, it is mostly related to the balanced development of investment and financing in the local market. In some stock markets, for many years, there has been a phenomenon that the scale of financing is far lower than the return on investment, which is also a reflection of the ability to attach importance to shareholder returns.

  For the A-share market, there is no shortage of funds, but there is a long-term lack of investment confidence. In the final analysis, it was in the past that too much attention was paid to the development of the financing function, and the shareholders' demand for return on investment was neglected. As more and more listed companies implement share repurchase and cancellation measures and increase stock dividends, the return on investment capacity of the A-share market is also significantly improved.

  Against the backdrop of the continuous improvement of the policy environment and low valuations, the investment attractiveness of the A-share market is still relatively strong. As long as A-shares pay more attention to shareholder returns and improve shareholders' shareholding experience, the investment value of the A-share market will also be greatly increased, bringing considerable investment return expectations to investors who hold shares for a long time.

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