Chapter 1427 [Beware of moving away from reality and toward illusion]

As time went by, in the afternoon, the market indices of the three major A-share markets maintained a unilateral upward trend.

At around 13:17, the Xinzheng 50 Index successfully stood above the 4900-point mark, and the increase also expanded to 3 percentage points. The distance from the 5000-point mark has been shortened to within 100 points, and the funds in the entire market are boiling.

The big financial sector also rose rapidly after 13:20 in the afternoon, among which the securities sector once rose by more than 6 percentage points, breaking through the high point of November 19 last year.

In this market, the shorts have been blown up. As long as you go long, it is almost difficult to lose money if you buy with your eyes closed.

As of the close, the three major A-share indices all rose sharply.

The Xinzheng 50 Index rose by +3.35% to 4945.19 points; the Shanghai Composite Index rose by +2.68% to 2754.36 points; the Shenzhen Component Index rose by +3.95% to 8446.92 points.

The three major trading markets had a total transaction volume of 1723.1 billion yuan. The volume of the two neighboring markets was also very obvious, with a total of more than 500 billion yuan. The transaction volume of the SGX market today once again broke the historical record, with a transaction volume of 1175.4 billion yuan, becoming the largest single-day transaction volume since the opening of the SGX market.

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Xincheng, Jingxinju Villa.

At this moment, Tian Jiayi was reporting to Fang Hong: "Overseas hot money is pouring in, and it is certain that the OTC funds are accelerating their entry, and leveraged funds are definitely increasing, including OTC financing."

Hearing this, Fang Hong said straightforwardly: "Let the SGX strictly investigate, strictly control and strictly manage the entry of leveraged funds into the market, especially OTC financing."

Today, the transaction volume of the SGX market not only returned to a single market to break through the trillion-level transaction, but also broke the historical record. The transaction volume in one day reached an astonishing 1175.4 billion yuan, and the OTC funds rushed into the market.

Among them, there are some people who leverage funds again. There are too many positive news in the current market, and they are all real and heavy positive news. Now the meeting is held at this time node, and everyone is looking forward to some good news for the financial market.

Not only did domestic capital begin to secretly increase leverage and engage in capital allocation, but foreign capital inflows also surged. More and more international hot money is also pouring into the SGX market. Since the beginning of the new year, the offshore RMB exchange rate has strengthened again, which is a good reflection of this.

Fang Hong said in a deep voice: "The SGX market is going to rise, there is no problem. The general direction is to maintain the upward momentum. There is no problem with the trillion-dollar transaction market becoming the norm, but this money cannot be leveraged, otherwise the catastrophic market in 2015 will be repeated again."

As long as the funds in the market are not too leveraged, there will be no big problem. Even if the mood ebbs, there will be no stampede. After all, the SGX market has a trillion-dollar stabilization fund and many other bottom-up mechanisms.

Moreover, Fang Hong had suppressed the space height last year. In October last year, the New Securities 50 Index rushed above the 4,500-point mark. If it had not been suppressed, it might have broken through 5,000 points on November 19 last year.

After reaching 4,500 points in October last year, it began to enter the adjustment stage, and at the end of the year it even pulled back to 4,200 points.

In order to reserve space height for 2019, Fang Hong is letting the SGX market compete with the Beijing Magnesium Capital Market in market value, but it does not mean blindly soaring. It cannot rely on the SGX being in the "teenage" stage to be reckless and overdraw consumption crazily.

Another thing is to wait for the value growth of the enterprise itself. The market bubble and value growth cannot deviate too much. The return on investment can be significantly ahead of the Beijing Magnesium stock market.

The key is to strictly control the entry of leveraged funds into the market. The high return on investment in the stock market has also magnified human greed. The Xinzheng 50 Index has been heading towards 5,000 points. The bull market has lasted for more than three years, and many people have forgotten the pain of 2015.

The necessity of controlling leveraged funds is self-evident.

If it is left alone, it will not only be bad for the market itself, but will also gradually drive the whole nation to "de-materialize" and repeat the mistakes of Lao Mei. How much leverage is added to the various financial derivatives and hedge funds in Lao Mei's capital market?

If leveraged capital allocation is left alone, everyone will not have to work, and no one wants to work. The stock market can make a fortune in the short term, and everyone can come to speculate in stocks to make a fortune. Who is willing to continue working? Who is willing to go to work? Who is willing to engage in the real economy?

In this way, in the long run, it will take less than ten years for the national economic fundamentals to move towards "de-materialization", which will inevitably lead to the hollowing out of internal industries. Isn't this the path of Lao Mei now?

Facts have proven that without the support of the basic foundation of the real economy, the virtual economy will be a dead end if it becomes dominant. In the end, it will be like drinking poison to quench thirst and eventually explode on the spot.

Fang Hong will not go to extremes, but will find a balance between the real economy and the virtual economy. Going to extremes is not good.

The two cities next door are in another stage. For a long time, the village believed that if the stock market continued to rise in a bull market, it would be detrimental to people's struggle. If they could make money easily from the stock market, they would not want to work and would want to get something for nothing. Therefore, they came to the conclusion that the stock market could not rise.

This is a typical move to another extreme. Except for a few financial rentiers who have made a lot of money, most people have been reaped with empty pockets. The result is sluggish consumption, which then stimulates consumption and releases inflation, but the funds cannot flow to the lower levels. They can only run idle in the financial system, which leads to a huge temperature difference between inflation for the rich and deflation for the poor. The two groups cannot empathize.

Fang Hong now has the ability to make changes, so he will naturally not go to extremes. The real economy and the virtual economy should seek a balance point for coexistence and prosperity. The stock market should rise, and the real economy cannot be lost.

In other words, it is to prevent the whole people from thinking of the wealth appreciation of financial assets as the core and main source of income.

But it is also a fact that human greed is greedy. When it is normal to be sure to make a steady profit of 100,000 yuan, you will think of adding ten times leverage to directly make 1 million or even 10 million yuan.

Obviously, such greed must be resolutely eliminated.

Fang Hong allows someone to earn 1 million or even 10 million, but he does not allow him to do so by leveraging. If he earns the same amount of money without leveraged funds, it means that he has contributed enough real wealth to society.

At its root, it is still a problem of wealth redistribution, but it is a redistribution from the capital market.

Trying to leverage ten or even dozens of times the leveraged funds to obtain short-term huge profits, to put it bluntly, is that the people who should have taken one share are greedy and want to take ten or dozens of shares more than others. Such distribution will eventually go wrong, and the problems will still explode in the form of concentrated outbreaks, which is the so-called blood collapse, a mess.

Tolerating leverage means letting the current group of people eat up everything, leaving nothing for the people behind, and only letting the latecomers take over. The latecomers may suffer a few losses and be fooled a few times, but they cannot be fooled all the time. In the end, they will either not play with you or turn the table over directly.

At this moment, Tian Jiayi looked at Fang Hong and asked, "What about the influx of international hot money?"

Hearing this, Fang Hong said calmly, "Don't worry about it. There is an upper limit on the shareholding ratio of foreign capital in SGX-listed companies. Hot money can't make waves. If there is more short-term hot money, long-term patient capital will have less. Let them play this game."

If there is more long-term patient capital in foreign capital, the share of short-term hot money will be less, and it can't make waves; vice versa, if there is more short-term hot money, long-term patient capital will have less. When the hot money leaves, patient capital will take over.

Because the upper limit of the shareholding ratio of foreign capital in SGX-listed companies is currently fixed, no matter how they toss, it will not affect the tone of the entire market. At most, it will cause some impact in the short term, which is completely controllable.

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