The Lifting Of The Gem Is Approaching.

In the eyes of some funds, the biggest feature of the A share market in the past two weeks is that the last "high ground" of small cap stocks - the sudden collapse of pharmaceutical stocks and the jump of large cap stocks.

Although there are differences in the interpretation of this phenomenon, it is unavoidable that with the circulation of the first wave of the lifting of the ban on GEM, the adjustment pressure on small cap stocks is increasingly obvious.

Late spring chill

If we look back this year, the pharmaceutical industry may be the most robust sector in the A share market. Even if the market fell by nearly 10% in April and May, the overall decline in the pharmaceutical sector is still negligible.

And some stocks have even risen strongly. The fund generally understands this: "medicine is one of the biggest beneficiaries of the government's structural adjustment policy, so it is also the best quality sector to get excess benefits."

This situation has changed in the past two weeks. The state's attitude on regulating drug prices instantly broke the market's strong optimism for pharmaceutical stocks.

The pharmaceutical sector turned to be weak in a short time. In just over a week, the total decline was nearly 10%.

After the small cap restructured stocks, electronic stocks and consumer stocks, another small plate appeared in the small cap stocks.

At this point, the small cap stocks have adjusted the valuation period in recent two months.

However, it is clear that the institution's judgement on the fundamentals is not so fast. Haitong fund still believes that there may be a "vacuum period" in policy in the three quarter. The medium and long term structural adjustment policies will be more promulgated, such as triple play, health care reform and new energy.

However, the market may also be more calm because of the lack of more than expected factors, opportunities for individual stocks, and the overall market has not changed much.

But another variable has been accompanied by the approaching of time. The gem started in October 30th last year and has gradually reached its peak.

First of all, the peak of the lifting of the ban will come. Agencies participating in the purchase of the new joint-stock network are entering the peak period of the lifting of the ban. Rough statistics show that the number of lifted shares in July will reach more than 6 times that of June.

The number of shares lifted in August will not be much less. Therefore, it can be deduced that the proportion of short-term circulation of institutions will increase significantly.

And from now on,

But even if the agency is still bullish and time is pushed back for another 5 months, starting from November this year, the original shareholders of GEM companies will enter the peak of circulation.

In November, it was the peak, and about 50 times the market value of the current number of institutions lifted (June).

According to the statistics of the Shenzhen Stock Exchange at the end of 5, as of May 31, 2010, the total market value of the GEM listed companies was 370 billion 824 million yuan, the market value of circulation was 83 billion 469 million yuan, and about 7 of the shares were not yet traded.

This undoubtedly doomed the next three years, small and medium-sized stock market greater circulation pressure.

This year, the blue chip fund is facing challenges.

And for the increasingly "brave" participation

Among them, this year's merit fund may be particularly obvious.

Take the stock fund fund's current performance champion Chinese businessman flourishing growth as an example, the first quarter of the ten heavyweight stocks include Guodian Nancy, Zhong Heng Group, science and engineering monitoring, Shuang Liang shares, southwest synthesis, and so on.

In addition, in the annual report of listed companies, the company has also become a major circulation shareholder of a group of small and medium sized boards and GEM listed stocks in Shanghai, such as Kai Bao, Ji Cheng Electronics and Chao Hongji.

Other funds also have similar moves. How to identify the risks and benefits of small cap stocks may become the key to the performance of these funds in the second half of the year.