I have learned some basic knowledge from IPO restart. An IPO will be issued both online and offline, so institutional and individual investors can purchase shares online and offline. Due to the new policy introduced this year, institutional investors withdrew from online market, and thus online lot winning rate has become higher. According to relevant regulations, anyone who successfully subscribed the IPO shares could not trade his shares within three months. When his shares are tradable, there are already some shares traded in secondary market. Therefore a reasonable strategy is necessary if you want to make a profit from offline purchase. Before a company goes public, its EPS (earning per share), PE (price earning), and PB (price/book value ratio) will be evaluated and a reasonable price for each share and purchase amount will be estimated. In the past, as long as an investor purchase newly issued shares, he sure will make a profit. However, things have changed. Some investors suffer from heavy losses due to misjudgment. In addition, China has put a restriction on amount of shares issued in the early stage of market. To protect investors’ interest, China starts to ease the restriction, but still controls the amount of shares free from limitation (if the amount is too large, ) and compensates tradable shareholders.
The Operation of Secondary Market
China’s exchange market is still in the early stage of development. Both institutional and individual investors participate in stock exchange. Some are experts, some are laymen. But it’s always true that a good investor should pay attention PE and EPS of China’s economy, and his mental state is important as well. I have a rudimentary knowledge of turnover, market index, opening price, close price, highest price and lowest price.
1. Long term investment
Institutional investment managers are the mainstay of long-term investments. They keep their eyes on macro economy and development of different sectors. To come up with a long-term investment goal, we need to take the following factors into consideration.
First, economic climate. China’s economy starts to warm up after an economic boom followed by a recession, which gives the credit to RMB 4 trillion stimulus package. China’s GPP (the biggest indicator of macro economy, which consists of investment, consumption and net export) is estimated to be 8% in the latter half of this year. Apart from GPD, investors need to pay attention to other indicators like CPI, MO, and MI.
This year Beijing has eased monetary policy, residents are more willing to take out savings and invest in order to get better returns than bank deposits pay. Besides, with 7 trillion RMB in new bank loans in the first half of this year, financial industry, real estate and banks are expected to have a better performance. In recent years, Chinese purchasing power and confidence have increased, which boosts the domestic demand and enterprises benefit from it. Chinese’s stock markets are closely related to foreign markets, especially Hong Kong exchange market. Whenever foreign markets fluctuate, Chinese counterparts will make an adjustment accordingly. Export-oriented companies have underperformed due to economic recession of Europe. Moreover, inflows of foreign capital have an influence on China’s financial and physical markets.
Second, industries. Investors can predict which sector will advance from macro economic development. For instance, promising prospect of economy keeps fueling the development t of banks, real estates, insurances and automobiles. However, underperformers of last quarter might have a chance to pick up as…