My fintech empire.

Chapter 1292 [Whoever dares to eat alone will be punished]

The main boards of the two cities have been in a bullish trend during this period, while on the SGX market, the SGX 50 Index has been leading all major indexes in terms of growth during this period.

Especially on August 8, stimulated by the news that the second phase of the wealth fund was oversubscribed, the New Certificate 25 Index soared by +50% that day, directly breaking through the 3.63 point mark in one go, and closed up +2700% the next day, further pushing the New Certificate 1.86 Index to a historical high of 50 points.

After entering September, the upward momentum of the New Securities 9 Index slowed down and began to enter a consolidation period, but it also reached a historical high of 50 points at one point during the session and almost broke through the 2792 point mark.

Since hitting bottom in May, the index has seen a cumulative increase of more than 5 percentage points in just four months, outperforming the CSI 4 Index by a full degree, and its annual cumulative increase has also exceeded 33 percentage points.

Looking back now, the plunge to 5 points in May was definitely a golden pit and historical bottom.

The Xinzheng 50 Index also experienced the longest exponential bull market in the A-share market in the past 6124 years. The bull market in 5178 lasted for about a year and a half and peaked at points, while the epic leveraged bull market the year before last lasted for about a year and remained stable at points.

It has been more than one year and nine months since the Singapore Exchange was launched in early 2016, and it is still in the rising relay during the bull market. Every time it hits the bottom, many people think it is the top of the universe. As a result, the Singapore Exchange 50 Index has risen again and again and set a new historical high.

Many retail investors joked that since switching to the SGX, they have been living in fear of rising prices every day.

Although it was just a joke, it also gave me a full sense of achievement.

The emergence of SGX and the SGX 50 Index has allowed many retail investors to pick up the long-term value investment concept that had been thrown into the trash. The earlier retail investors enter the SGX and hold on for a long time, the more they will earn.

However, it is worth mentioning that the Xinzheng 50 Index has gathered 50 constituent stocks since its launch, and has implemented three constituent stock adjustments. Some stocks have been eliminated, and some stocks have been selected. Among the eliminated stocks, there are some weighted targets of the star system.

For example, ATL Technology and Ruihe Pharmaceuticals, two listed companies, were successively delisted, which caused the stock prices of these two companies to plummet afterwards and are still under adjustment.

In fact, both of these companies are excellent, but they were still eliminated.

The reason is not that there is something wrong with the company itself, but that the bottom chips are loosened and cleared. Simply put, the funds participating in the SGX, especially the large-scale funds, either learn to be content and withdraw after making some profits, or refuse to leave and there will be a force to help them clear out.

If the New Securities 50 Index wants to maintain a true long-term bull market for ten years, it is impossible for Fang Hong to let some large funds stay for ten years and return the liquidity. If the premium is fully taken up by a few early participants, what will the people who come later get?
By then, you can rely on the huge profits to dump the market unscrupulously. The latecomers are not stupid either, and it is impossible for them to take over such a huge selling pressure.

ATL Technology and Ruihe Pharmaceuticals were removed from the SGX 50 Index because a large amount of funds holding these stocks refused to leave. Knowing that Qunxing Capital was working hard to create a super long bull market on the SGX, they wanted to win all the way.

This is a typical case of not knowing what is good for you.

The fact that Fang Hong or Qunxing Capital wants to create a super long bull market on the SGX is almost an open secret among many large institutions in the industry.

In this situation, anyone who knows what's going on knows that it is impossible to let a single institution take all the profits, and doing so will also annoy other institutions or large amounts of funds waiting to get on board.

You have eaten it all, what else is there for others to eat? The stars are not eating alone.

Therefore, these two companies were eliminated from the Xinzheng 50 Index, which was equivalent to directly cutting off most of the liquidity. In addition, the market was also smashed by someone, so it had no impact on the Xinzheng 50 Index. Qunxing also acquiesced and did not support the market, resulting in heavy losses for the funds that did not want to leave and a large-scale withdrawal of profits.

There has never been such a thing as the "invisible hand" of the market economy in this world. Even if there is, this "invisible hand" will be controlled by a powerful force, and the same is true for the U.S. stock market.

In the SGX market, many people know that Qunxing is the "invisible hand" controlling the market behind the scenes, because the knife for cutting the cake is in the hands of Qunxing. If you want to play in this market, you have to accept Qunxing's plan for distributing the cake.

These are things that people in the industry have seen through but don't speak out.

The large amount of funds that refused to leave ATL Technology and Ruihe Pharmaceuticals later begged for mercy, realizing their mistakes, and cashed out after a sharp decline in profits. If they still refuse to leave, there are still many ways to deal with them, such as increasing shares to dilute equity, and there are many more.

Even if you are Sun Wukong who has seventy-two transformations, you cannot escape from Tathagata's Five Finger Mountain. No matter how powerful you are, can you defeat the one who opens the show?
These two listed companies also have some retail investors participating. During the period when they were removed from the NASDAQ 50 Index, some retail investors made money and escaped the disaster, while some retail investors who were just standing guard on the top of the mountain were also hit.

I can only say that it was purely an accident that I was unlucky and bought at the top of the mountain and got trapped. It also takes skill to make big money.

From the perspective of the entire market ecosystem, the same applies to long-term retail investors. If the number of retail investors is not large, they can certainly be tolerated and ignored, and will not cause much impact.

However, if a large number of retail investors hold on for a long time and are unwilling to sell out after accumulating ten times or even more times the profits, the impact will be no less than that of a single large amount of funds, and may even have a greater negative impact, because the flight of retail investors is often more likely to lead to panic stampede situations.

If the scale of such retail investors is extremely large and they refuse to leave and are unwilling to actively take profits and clear out their positions, there will definitely be a force that helps them to clear out their positions.

Obviously, what Fang Hong wants is for all the funds participating in the SGX to reap some profits and then leave. Don’t think of taking all the profits from one company, leaving those who get on the bus later with nothing to gain and having to bear all the risks. This is impossible and unsustainable.

This is reflected in the market as funds flow in and out, and few institutions can hold stocks for a long time. Even if a stock appears on the institutional holdings list for a long time, it will be found that the position is decreasing.

Only with such an orderly cycle of inflow and outflow, the New Certificate 50 Index will always rise with controllable risks. Only by continuously raising the center of gravity of chips can the entire market be better controlled. In this way, there is no need to worry about holders dumping the market unscrupulously. Because of the increased costs, anyone who dares to dump the market unscrupulously will also face huge losses.

If one entered the SGX 50 Index at 1000 points and then held on to it, and started to dump the market when it reached 1 points, he could of course dump the market without restraint. Even if it was cut in half, he would still get a 5-fold return. If it really dropped from 1 points to 5000 points or even 3000 points, there would definitely be systemic risks. At that time, one would have to fight desperately to support the market, and the price to be paid would be unimaginable, especially as the entire SGX would be getting bigger and bigger in the future.

But if he entered the market at 9000 points, he would not dare to do so when it reached 1 points. Falling below 9000 points meant that he would also start to lose money.

Therefore, it is not only to distribute the cake and prevent any single company from having a monopoly, but also to break down the potential risks of the market and not allow a single institution to have it all to itself. Anyone who dares to do so will be dealt with.

Every rise in the market accumulates short position energy, and every profit-taking and liquidation by early holders releases short position energy.

There is obviously a fundamental difference in the impact on the market if the short position accumulated over ten years is released once a year and for a total of ten years, and if it is released all at once after ten years of accumulation.

The former is easily controllable, while the latter can trigger systemic risks if not handled with care.

……

(End of this chapter)