The Research Of The Investment Value Of A-share Market

This paper takes the A-share market of China from October 2007 to January 2016 as the research period.The sample stock pool contains 1364 A-share listed company,which have completed their reform of non-tradable shares until the start of the research period.By this way the investment value of China's A-share market has been reevaluated.In this paper,the "investment value" of one specific security has been redefined.Whether one security deserve being invested during a specific period depends on the result of the comparison of two numbers " total interest rate(TIR)"and " total rate of return(TRR)".If the TRR is greater than TIR,the very security will have investment value,otherwise the security shall not being chosen by investors rationally.TRR is traditionally calculated by the buying cost,the final selling income and dividends received during the whole investment period,while we compound the year's interest rate announced by the People's Bank of China to get the TIR.Based on the analysis of the data,we find 35.63%of the A-share listed stock deserve being invested during the specific period.If we focus on stocks in different boards and industries,we can find 58.62%stocks in small and medium enterprise board(SME Board)deserves being invested while the proportion of main board is only 32.27%.As to different industries,7 industries including computer,military industry,medicine and biology,media,electronics,communication and appliance industries deserve being bought,for more than 50%stocks runs better than TIR respectively.And the best industry is computer in which as high as 72.73%listed companies overcome the TIR.So the conclusion of this paper is the whole A-share market does not deserve being invested,but the SME board and specific industries deserve being bought.Finally,as the start and end of the investment period is October 16th 2007 and January 27th 2016 respectively,when the Shanghai Stock Exchange Composite(SSE Composite)gets to its top and bottom,this result is conservative.After all,the conclusion tells us the A-share stock market of China deserves being bought in and held wisely from a certain degree.At the same time,it also warns investors,especially the small and medium types,never ignore the investing risk when deciding to buy some stocks in this market.