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"Penny stock era" is a little far from A shares

August 18, 2018 18:00
Author: Leatherback sea Chau
source: International financial newspaper
edit:Eastern Fortune Network

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On August 15, the share price of Zhonghong Co., Ltd., which was investigated by the Anwei Securities Regulatory Bureau due to the report of the first quarter of 2017, the semi-annual report, and the third-quarter report, was once again down 1 yuan.On the same day, the stock opened at 1.01 yuan, then went down directly and fell below 1 yuan, and finally closed at 0.94 yuan, which was 9.62%.This is also the only stock in the A-shares traded on the same day that has a closing price of less than $1.

It is not surprising that Zhonghong shares have become "penny shares". In fact, as early as June 20 this year, the stock had fallen below 1 yuan in the intraday, and then on the 22nd, 26th, and 29th of the three trading days, there was an intraday "Imperial" situation. . Although the stock price of Zhonghong shares rebounded and once rebounded to 1.22 yuan, it was later adjusted back to 1 yuan, basically struggling above the face value.

Whether irresponsiblely becoming a "penny stock" means that A shares have ushered in the "penny stock era", which is undoubtedly a problem that investors are very concerned about. If A-shares really ushered in the "penny stock era", many stocks will become "penny stocks", which will mean an increase in investor losses. After all, the emergence of "penny stocks" means that stock prices have fallen.

But in fact, the author seems to be no answer.

  Although the value investment concept is gradually transplanted into the A-share market, the A-share market will have a polarized trend, and a large number of low-priced stocks, such as 1 yuan stock, 2 yuan stock, 3 yuan stock, etc., will appear. The possibility of a large number of "penny shares" is extremely small.

When it comes to "penny stocks", investors will naturally think of the Hong Kong stock market. Hong Kong stock market "penny stocks" everywhere, not only the price of many stocks is less than 1 Hong Kong dollar, some only a few cents, or even 1 cent. But this situation will basically not appear in the A-shares.Because of these "penny shares" and "mao stocks" in the Hong Kong stock market, the fundamentals of their companies are relatively poor. Moreover, Hong Kong-listed companies often “go out of the old”, split stocks in a while, and share shares in a while, toss the stock price very low.And the stock value of the Hong Kong stock market is not uniform. Some stocks have a face value of only one dime, and the issue price of the stock is a few cents. These are all important reasons for the “penny stocks” in Hong Kong stocks and the “mao stocks” everywhere.

This situation in the Hong Kong stock market is basically absent in the A-share market. For example, the face value of A shares is basically 1 yuan (except for very few stocks), A shares are not allowed to "out of the old", and because the Chinese economy as a whole is full of vitality, the fundamentals of listed companies are generally not Especially bad. Therefore, A shares cannot be like Hong Kong stocks.

  Not only that, A-share companies have more or less "shell value."In particular, the number of listed companies is often the image project of local governments. Local governments do not want local companies to withdraw from the market. They not only try their best to help local enterprises to protect their shells, but once they really experience the delisting crisis, local governments will actively be listed companies. Mergers and acquisitions matchmaking, and some listed companies themselves will actively look for ways to live. For example, *ST Hairun, which has been suspended for reorganization in the A-share market, is another “penny stock” in the A-share market. However, three days after the stock “Chengxian”, the company suspended its licensing. This is an important way for the company's stock to bid farewell to "penny stocks."

  In addition, the A-share market is a market dominated by individual investors, and individual investors have the habit of buying cheap stocks.Especially when the stock market is getting better and there is a sharp rebound or bull market, the low-priced stocks will be speculated by the market, and the stock price will rise sharply, which will greatly push up the price of low-priced stocks and let the low prices The stock is far from the face value.

  Of course, there is also a very important one. The delisting system of A shares also determines that “penny shares” will not remain in the market for a long time.According to the A-share delisting system, when the price of a stock is less than 1 yuan for 20 consecutive trading days, the company will be forced to withdraw from the market. In addition, for stocks whose stock price is less than 1 yuan, the listed company will maintain the stability of the company's stock price through various channels, and promote the company's stock price to get out of the "penny stock" as soon as possible. This also determines that "penny stocks" will not become a common phenomenon in the A-share market, and the A-share market will not usher in the "penny stock era."

(The author is an independent financial writer and columnist)

                (Editor: DF010)

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