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Influence Of China’s Population Aging On The A-share Market

Posted on:2015-01-21Degree:MasterType:Thesis
Country:ChinaCandidate:W J MeiFull Text:PDF
GTID:2297330464455484Subject:Finance
Abstract/Summary:PDF Full Text Request
The four pillars of the social structure that contains population structure, economic structure, political structure, cultural structure.Population structure is the core demographic factors bearing social and economic operation, that determines the changes in economic growth and social needs. Closely linked, while its stock market pricing process will have some impact between demographic changes and changes in demand and economic growth and asset requirements. Chinese population aging is still in its infancy, but its advance speed, the total elderly population, the economy and " old before getting rich." These negative factors are likely to lead to long-term Chinese economy is weak, uncertainty greatly increased, along with the relative reduction in the space reserved for policy deployment, A-share market is likely to decline in the face of long-term trends and increased volatility situation.The stock market is a complex system, it is affected by many factors, such as economic growth, economies of scale, market efficiency, cost of capital, market liquidity, and investors’expectations and other government policies, population structure changes is only one of the many variables. But in the long perspective, population structure changes and the pattern of the stock market is one of the core of the decision variables have a significant impact on stock market trends, valuation, size, volatility and other factors.From the stock market fundamentals perspective, in a structure of population ageing society, the whole society labor population and the social production eff iciencyratio decline at the same time, and accompanied by social spending habits change. Proportion of the labor force decline will cause social dependency burden, labor shortages, rising labor costs, thus affecting the basic of demand for products and the level of corporate profits. Decline in the efficiency of social production, will change the relationship between social contrast between output and consumption, At the macro level is the embodiment of international balance of payments deficit and the saving rate decline, leading to social investment rate and the economic slowdown. Changing consumption habits is a total change of course, but also a process of structural change. Population aging will lead to a decline in its initial stage of total social spending, and manufacturing industry of the second industry due to the decline in demand, its share in the social production gradually declining proportion, and service-oriented tertiary industry due to rising demand for elderly services demand, making its share rise in social production, So that the transfer of social production occurs in the inter-sectoral pillar industries, namely the secondary industry to tertiary industries, and low-value-added industries sectors leap to high value-added industry. Overall, China’s aging population presents a negative impact on the fundamentals of the A-share market, and due to the current A-share market index, a larger proportion of traditional industries, it is in the process of the entire stock market prices and valuation trend is gradually declining. But with the rise of the tertiary industry in the national economy as well as weights in A-share market index, stock market trends will rise slowly.The aging of the population will also change the structure of A-share investors, in the background of aging population, the elderly’s risk preference is low, the number of retail investors in the A-share market will decline; same time as pension and social security funds grow and enter the market, will gradually increase the proportion of institutional investors. With the voice of institutional investors increasing, their respected value investment style will dominate the future market, the average holding period of the market is increasing. More stable and value-oriented market, will attract more long-term funds into market, and there will be more high-quality companies are willing to issue shares, and grow together with the market. This is significant to create a stable, efficient and prosperous A-share market.The traditional model of stock market research mainly focuses on the impact of fundamentals, monetary conditions on the stock market, but these variables will not only lead to a structural change of the stock market, but is also affected by changes in population structure, it is necessary to extend the study of the stock market to the field of demographic change. And systematic studyis relatively few intraditionalresearch, theoretical system has not been set up perfectly, especially the lack of support ofreliable quantitative models.This paper combines the method of population science, economics and statistics, on the basis of theoretical analysis, combined developed economies USA, Japan, South Korea with the different aging degree, and the30 years data of population structure, economic structure, pensions and securities market scale structure. Using the method of mathematical statistics and empirical analysis, inspection unifies, trying to start from theeconomics point of view, found and discussed mechanism of the aging of the population in a country or region have a long-term effect on the economic growth and capital market; On the other hand, starting from the statistical point of view, using cointegration test and VAR model, makes an Empirical Study on the dynamic relationship between aging our country population, economic growth and A-share market trends, whether there is a long-term stability relationship between them, and analyze the long-term relationship characteristic. More comprehensive, systematic research, analysis, discovery, understanding and mastery of knowledge, thus expanding the demographic changes in our country, understanding the relationship between economic growth and stock market trends, our investment activities is significant.Under the background of aging population, although the market has its regulating mechanism, but the system will speed up the adjustment of efficiency, to achieve a multiplier effect. Current A-share market has such market efficiency is not high, the value found weak, policy makers positioning errors and other defects, making the idea of rampant price speculation dominated the market, the market is gradually reduced to the dealer price manipulation and misappropriating tools listed companies. These long-standing problem, but most are still pending, investors have voted with their feet, or wiped out in the downward trend; Shanghai Composite Index reached a high point of 6124 points in October 2007, but six and a half years has elapsed, the Shanghai Composite Index has fallen below 2000 points, and have yet to see signs of an upward trend change is both a reflection. Market system need to change, I think it should be from the following aspects:Such as the RMB can freely circulation under the capital project, open domestic and foreign investment restrictions, market trading fair, decentralization, standardize the market, give power back to the market, stable expectations, and establish a multi-level market, accelerate the pension and enterprise annuity into market, accelerate the way of stock issued to the registration system. Only really do to achieve fairness, justice, market trading environment, investors’confidence in the market to recover, to the stable development of capital market, to maintain the interests of investors, andthe stock market price discovery and resource allocation function can play. Only in this market, Investors can enjoy the growth dividends of listing Corporation.
Keywords/Search Tags:Populationaging, Economic growth, Investors structure, Style transformation, Stock market trends
PDF Full Text Request
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