A-shares May Go T+0: 'They' Buy 70% of US Debt
Here is the translation of the provided text into English: **87 billion!
This positive news is most reasonable for the surge in trading volume in the A-share market last Friday, with the total turnover exceeding 87 billion yuan, a significant increase of 269.4 billion yuan compared to the previous day, after several days of transactions falling short of 500 billion yuan.
What kind of positive news could stimulate such a surge?
With the weekend over, no new policy-related positive news was found.
Based on a synthesis of market information, there are mainly two positive factors: First, the central bank's purchase of special government bonds, which could be as beneficial as a reserve requirement ratio cut, but such positive news failed to drive the market previously.
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Second, there are rumors that the interest rates on the existing 38 trillion yuan of housing loans might be reduced, and the market expects that the deposit interest rates would theoretically follow suit, but these are all just rumors.
The direction of the positive news is the real estate sector, but the entire sector did not rise much, with Vanke and Poly not hitting the daily limit.
Moreover, it is generally unrealistic to expect an explosion just from a slight interest rate reduction.
After examining all possibilities, the most reasonable positive news was found to be the speculation by Reuters on August 10th, cited by the media, that the A-share market might start preparing to open T+0 trading, mainly due to the low trading volume after restrictions on quantitative trading.
Indeed, the recent trading volume in the A-share market has frequently fallen below 500 billion yuan.
This is a positive effect after the regulatory authorities increased quantitative supervision last year.
At the same time, from an international perspective, the A-share market does have a demand for T+0 trading.
As the world's largest economy in the future, the capital market will eventually become international, and theoretically, the rules will align with international standards.
Under T+0, the price limit can be kept in place first, which can protect speculation while enhancing market activity.
From an international perspective, under market conditions, the index is strong, but the downside is that junk stocks suffer, which is not conducive to supporting industries.
Therefore, the A-share market has been hesitant to adopt T+0 and no price limit.
However, it seems that not aligning with international standards is no longer an option, because if the market wants to grow, it needs to be more open to accommodate stronger leaders.
This requires T+0!
The expectation for T+0 is becoming more realistic, as the trading volume is too low, from the past daily transactions over a trillion to now less than 500 billion yuan, which is indeed too low.
If so, where are the opportunities?
Everyone should study this well.
** **Revealed!
"They" bought 70% of U.S. Treasury Bonds.
The latest data from the U.S. Department of the Treasury website on July 29th shows that as of July 26th, the U.S. federal government's debt has reached 35.001 trillion yuan, breaking through the 35 trillion yuan mark.
The U.S. government holds about 40%, foreigners hold about 20%, and the remaining 30%-40% are mainly held by other institutions and individuals in the U.S., so 70% of U.S. Treasury bonds are actually held by the U.S. itself.
In 2023, the fiscal revenue of the U.S. federal government was 4.4 trillion yuan, and without considering interest, the scale of 35 trillion yuan in U.S. Treasury bonds is equivalent to 8 years of fiscal revenue for the U.S. federal government.
In contrast, according to the Ministry of Finance data, as of the end of July 2024, the outstanding local government debt in China was 42.80 trillion yuan.
The remaining average term of local government bonds is 9.3 years.
In 2023, the national public fiscal revenue reached 21.7 trillion yuan.
The central government's leverage ratio is 22.6%, which is very low globally, with a debt balance of about 28 trillion yuan.
However, unlike the West, China has relatively strong state-owned enterprises.
According to the central and local situation, in 2022, the total assets of state-owned enterprises in China were 339.5 trillion yuan, the total debt was 218.6 trillion yuan, and the state-owned capital equity was 94.7 trillion yuan, with an average asset-liability ratio of 64.4%.
Overall, China's national debt has a relatively low leverage ratio, and with a large economic volume, the total debt security is relatively stable.
The biggest volume now is how to go out and expand financial influence.
Currently, China mainly adopts a horizontal strong strategy, through China+Arab World, China+Asia-Pacific, China+Muslims, and China+Africa.
By taking a peaceful route, it promotes the wave of urbanization construction in these regions.
From the A-share mid-year report data, it can be seen that the good performance is either financial or infrastructure, which is a very intuitive reflection.
If these horizontal strong routes are fully implemented, China's overall economic volume can increase several times.
The most urgent task now should be the internationalization of the capital market, that is, to let the capital market go out and seek cooperation and alliance recognition.
The United States currently mainly relies on war, creating panic and chaos.
By using strategies such as virtual currency and strong petrodollar, it attracts global capital inflow to consolidate capital power.
For the resolution technique, peace is the most intuitive strategy, and a strong manufacturing industry is the best way to resolve global inflation attacks.
Currently, China is operating in this direction, but it also faces a routine economic bottleneck volume.
When the development of manufacturing and infrastructure encounters bottlenecks, the best resolution strategy is to develop the financial industry.
The United States has done this, not thinking about repaying your debts, but first thinking about collapsing you...
If not, the consequences will be like Evergrande, like a Ponzi scheme.
Because traditional businesses, you cannot compare with the high leverage of finance.
If you do not move towards the financial direction and want to fill the previous holes through other traditional opinions, this idea is too naive.
Look at Evergrande, real estate is high leverage, and then later playing football, selling water, and manufacturing cars, one is smaller than the other, which is destined to be unable to fill the high leverage of real estate.
Therefore, if Evergrande had turned to stock speculation at that time, it might still have a lot of vitality now.
If Evergrande had invested in Bitcoin, Moutai, and Tesla ten years ago, it might have become a hero now.
These large institutions cannot speculate like retail investors and can only layout large leaders.
The global financial explosion in the past ten years has precisely benefited the leaders the most, and Buffett's market value has to be tens of thousands of people, that's it.
So, if you understand from an enterprise perspective to a national perspective, the stock market needs a bull market, but different from the past, this time it needs a value investment bull, not a bull where garbage flies everywhere.
You will understand that the market is big, and you want to bloom everywhere, which is not easy.
Today's market heavy news, Zong Fuli took over as chairman.
Zong Fuli returned a month later, and the board of directors underwent a major blood transfusion.
The market is speculating whether Wahaha's "palace struggle drama" has ended.
But whether it ends or not, the future Wahaha needs to speculate on stocks.
No matter which industry, as long as the industry reaches a bottleneck, stock speculation will be a good way.
Don't talk about feelings and so on, when New Hope Group, if not engaged in real estate, not engaged in finance, a pandemic will be at risk.
There are developed countries like Norway, they also speculate on stocks, 70% of Norway's national sovereign funds are in U.S. stocks.
The Middle East's Saudi Arabia, and Asia-Pacific's Japan, with money, they all invest in U.S. stock leaders.
This is not shameful, small countries are like this, they are bottlenecked, what else can you do?
The total scale of global ETFs exceeds 13 trillion U.S. dollars, exceeding the total market value of A-shares of 70.05 trillion.
China's index funds are somewhat different from the West, the Western index component stocks are relatively few, about 30 stocks are the main index, and we directly include 300 companies in the Shanghai and Shenzhen index, such an index is indeed difficult to rise.
Because the leaders that can rise are generally not a sector, an industry leader, but a leader of an economy, a leader of an ecosystem.
It is not an enterprise, but a super comprehensive economic entity.
Such enterprises can have a larger space.
Of course, technology and finance have strong monopolistic characteristics, and finance is strong in A-shares, but the volume is large, and it is not easy to give too much expectation.
However, in the long run, ETFs will be the main source of funds, driving the index, and benefiting the growth component stocks.
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