It has reached a new high since 07, and in fact, the number of companies that increased issuance in the first half of 09 has already set a record high. Since the second half of the year, the number of announced increase issuance plans has approached twice that of the first half, showing the expansion of issuance. Moreover, among the 185 increase issuance plans released in the second half of the year, although there are more targeted increase issuances, they do not involve asset injection as in the past. Only 17 increase issuance plans aim to achieve overall listing, and another 20 listed companies' major shareholders plan to inject assets into the company through targeted increase issuance. More importantly, it is about the credit crisis in finance. Once investors lose confidence in the credit of finance, it will inevitably lead to capital withdrawal. However, taking China as an example, banks and financial industries will not be substantially affected, but psychological factors have a greater impact. What should investors think about this? Today's special time for Yuming Finance will discuss this topic.
Everyone knows that at the end of the third quarter of 08, the subprime crisis outbreak triggered a series of financial crises. The culprit was actually the emergence of a large number of complex financial derivatives. These products carried significant risks and were continuously expanded through the leverage effect of the financial sector, eventually leading to an uncontrollable situation. From this perspective, related individual stocks in the A-share market will not be substantially affected, but investors may also consider where all the funds raised by current listed companies go. Since July 1st this year, a total of 185 listed companies have announced increase issuance plans, with an amount reaching 170.8 billion yuan. There are many projects pursuing luxury without considering risks and returns, and these projects, piled up with huge funds, have now become enormous financial bubbles, devouring substantial amounts of money, ultimately leaving them heavily indebted. However, even so, its impact compared to the wave of complex derivatives in 2008 remains limited. Its direct impact is the significant negative effect on creditors and similar doubts on related financial creditor funds. Where did the sponsor's money go? The latter is also the key to triggering the credit crisis in the financial industry.
From the extravagance of wealthy merchants to today's debt default crisis, from excellent ratings to rapidly becoming junk ratings, sponsors are increasingly confused about world finance. Moreover, due to the increasing interconnectivity of the global market, after this incident erupted, it quickly led to declines in bank and financial stocks worldwide. I believe that such behavior is not entirely due to concerns about banks and financial assets.
This time, Dubai World's issue isn't because of this, but rather due to industrial risks. It mainly developed some of the most luxurious real estate projects globally. Nakheel Real Estate Company under its umbrella constructed many residential projects and land reclamation works, including the famous "THE WORLD" artificial archipelago and the Palm Islands. In June, it was announced that a new tallest skyscraper in the world would be built, surpassing the current "Dubai Tower".
And other financing and increase issuance proposals need to be "considered", the possibility of raising money is very high, which actually deserves attention from sponsors. When the Dubai incident progresses further, it will inevitably lead sponsors to delve deeper into how market funds are used. Additionally, the recent sharp drop in the stock index is also a kind of concentrated release of risks. Previously, the market had accumulated risks to the peak, most obviously indicated by what I mentioned in last Saturday's financial article: why flu pandemics, natural gas shortages, snowstorms, etc., became speculative hotspots without corresponding impacts leading to declines. All these are negative factors, treating bad news as good news, which is the greatest manifestation of the market's numbness to risk.
Regarding this, I still maintain the same stance: increase issuance itself is a neutral event. If increase issuance cannot enhance shareholder rights and cannot succeed, but is merely for financing, or even if some listed companies are not short of money, using secondary market financing to buy stocks, such behaviors deserve caution from sponsors.
Thoughts on the impact of the new "financial crisis" on the stock market. Similarly, market speculation is also like this; when concepts reach their extremes, it is actually the beginning of risk release. Investors should remember one point: when you feel helpless, what you should do most is hold onto your money tightly, rather than let risks control your capital. To know the post-market commentary on individual stocks, daily brief reviews of individual stocks are available for your reference. Stock secrets insider reports, click to study and provide tools for your individual stock operations.
The Middle East's United Arab Emirates Dubai faces a debt crisis. Dubai announced that the state would intervene to restructure its sovereign investment company, Dubai World, and seek a six-month delay in repaying debts. If Dubai World becomes unable to repay its debts, it will be the largest default event of a sovereign fund since Argentina's default in 2001. Such a situation has not occurred even during the most difficult times of the 2008 financial crisis, thus causing concern about triggering a new round of financial storms.
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