Ping An Should Be Suspended to Maintain Market Stability

2008/3/7 15:12:32

After Ping An's one-day farce was exposed, it immediately revealed its true colors. For an action as massive as Ping An's, and given that Ping An itself is deeply involved in the secondary market, it should absolutely be suspended pending the regulators' final decision on its additional share offering. Otherwise, as we see now, a single stock completely dictating the market's direction is an enormous harm to market stability.

Today's broader market barely maintained the original 5-minute oscillation around 4331, but all stocks showed signs of fatigue. Stocks require a certain continuity — when they're constantly disrupted by pointless sudden events, it's not just a matter of aesthetic fatigue anymore.

If repeated attempts to break through 4391 points keep failing, with something ridiculous happening every time it barely gets there, then another probe to the bottom becomes an inevitable choice for the market. Right now, time is running out for the broader market. If there's no improvement by early next week, another downward probe or even breaking below previous lows would be nothing surprising — after all, we're only one step away from 4123 points.

Of course, no matter how the broader market moves, for now it can all be viewed as part of the original large 30-minute oscillation. Mid-term, a very real question is: if the Two Sessions conclude without any fundamental catalyst for an upward push, then a vicious selloff creating a major bear trap might be a perfectly normal choice.

The worst-case scenario the market potentially faces is: prolonged back-and-forth here with no resolution, then ChiNext launches and hot money all runs over there, turning this market into a besieged city, tediously grinding within a range of a few hundred points for N months or even a year. This scenario is not at all unimaginable.

Of course, the bulls still have time, and they still have opportunities to counterattack. Even hitting new lows wouldn't be the end of the world. The problem now is: if certain fundamental issues aren't resolved, even if the market holds steady, what's the reason for going up? Would the market rally just so the likes of Ping An can put on a show? How to unlock upside space — this requires fundamental support. And where are these fundamentals right now?

Weekend — no more stock talk.

Signing off, goodbye.