Source: Investment Education Center of Shenzhen Stock Exchange
Some individual investors have a common worry when they participate in stock trading: after buying a stock that is gaining momentum, the stock price always falls, and I receive the last stick every time. Why is it always me who gets hurt? Judging from some illegal cases, it is most likely due to the lack of analysis and research on the fundamentals of stocks. They only traded based on the graph trend and felt their sense. They accidentally bought the stocks that the illegal subjects deliberately created the illusion of rising. Hold on to high stock prices. Let's use an example to illustrate:
From February 12 to March 23, 2015, in just 23 trading days, the GEM C shares rose by 55.1%, while the GEM index rose by 20.93% during the same period. The deviation between the two was 34.17%. In less than a month, the income is more than 30%, and the money-making effect of the stock market comes really fast. What is the reason for the outstanding performance of the stock price? What is the story behind the scenes?
The fundamentals of stocks have not changed significantly
Judging from the announcements issued during the 23 trading days, there are two positive announcements for C shares: The first is the company’s 2014 performance bulletin on February 28, 2015. The net profit increased by 176.74%, but the absolute value was only 60 million. , And the average net profit of listed companies on the GEM in 2014 was 94 million yuan; the second was the 2014 profit transfer announcement issued on March 18, 2015. The actual controller proposed to distribute cash of 0.8 yuan to all shareholders for every 10 shares Renminbi (including tax) and 10 shares were transferred. According to statistics, there are more than 90 companies that intend to transfer 10 shares to 10 shares by GEM companies, and there are many companies that transfer 10 shares to 20 shares or 15 shares. From the horizontal analysis of listed companies, the two announcements are not eye-catching.
In fact, C shares have soared before the above announcement, as can be seen from the headlines of many eye-catching media reports: "The concept of Internet finance has risen again C has three consecutive daily limits" (February 12, 2015), "Internet Concept Stocks have been repeatedly slammed by institutions in a fierce long-short showdown" (February 16, 2015).
Violating subjects were punished to reveal the reasons for the rise
The fundamentals of C shares are not outstanding. Are they being sought after by the market based on concepts alone? Is the stock price rise due to the value mining of investors, or is it due to the instigation and fuelling of illegal entities?
In March 2017, the "Administrative Penalty Decision" issued by the China Securities Regulatory Commission revealed the reason for the surge in C's share price. It turned out that the illegal subjects with huge amounts of funds, together with their relatives and friends, used multiple accounts to manipulate the stock price, continuously pushing the C stock price higher, and selling the stock while it was high, with a profit of up to 200 million yuan. The methods used by relevant illegal entities to manipulate stock prices include:
1. Use the controlled account to perform reverse and reverse transactions to inflate trading volume;
2. A large percentage of orders are withdrawn after declaration and false entrustment is made;
3. Drive up the stock price, create an atmosphere of speculation, attract investors to chase the rise, and then sell for profit.
Take March 23, 2015 as an example, the relevant account used its capital advantage to create a trend of rising stock prices at the opening, attracting other investors to follow suit to buy. The stock immediately closed the price limit shortly after the market opened, but the violator sold all of them. The stocks he held left the market in a casual and profitable manner. The stock price trend and manipulation on that day are shown in the following chart:
Manipulation of stock prices can not escape the law
The "Securities Law" clearly stipulates that it is forbidden to use capital advantages, shareholding advantages, or use information advantages to combine or continuous trading to manipulate securities trading prices or securities trading volume. This case tells us that in the process of participating in securities trading, investors must strictly abide by securities laws and regulations and exchange trading rules and other relevant regulations to avoid trading behaviors having an impact on securities prices. The legal network is restored, and the securities supervision and law enforcement agencies have always maintained a high-pressure attitude against violations of laws and regulations. If they deliberately manipulate stock prices, they will be severely punished in accordance with the law. In addition to the confiscation of the illegal proceeds of 200 million yuan, Fines of up to 600 million yuan were imposed.
On the other hand, if there is a lack of independent and in-depth thinking about the fundamentals of stocks, and buying stocks chasing high prices based on the subject matter concept or sudden rise, it is very likely that they will become victims of market manipulation by illegal entities. Investors should carefully distinguish, think deeply, and make cautious decisions in stock trading, so as to avoid becoming a picker who stands guard at high stock prices.
(Disclaimer: The information in this column does not constitute any investment advice. Investors should not use such information to replace their independent judgment or make decisions based solely on such information. The contributors require the information in this column to be accurate and reliable, but not It does not make any guarantees for its accuracy, completeness and timeliness, nor is it liable for losses caused by the use of the information in this column.)