Is the Central Bank's intervention a case of having the will but not the way?

At three in the morning, just as I was about to turn off the lights and go to sleep, my phone suddenly lit up. It turned out to be a WeChat message: "Buddy, the Central Bank has taken action again! The A-shares are going to take off tomorrow!" I was bewildered and quickly clicked on the news to check. What a surprise, the Central Bank actually came up with a new thing called "Securities, Fund, and Insurance Company Swap Facility" and released 500 billion yuan all at once! What are they trying to do? Save the market?

The Central Bank's sudden "loosening" led to uneven temperatures in the A-shares

On March 10th, the Central Bank suddenly announced the creation of the "Securities, Fund, and Insurance Company Swap Facility" (SFISF), with the first operation scale reaching as high as 500 billion yuan. As soon as this news came out, the market immediately exploded. Many people cheered and thought this was a signal that the Central Bank was going to save the market vigorously. But is the truth really like this?

The next day, as soon as the market opened, the A-share market showed divergence. Although the Shanghai Composite Index rose by 1.32%, the Shenzhen Component Index and the ChiNext Index fell by 0.82% and 2.95% respectively. What's more interesting is that the state-owned enterprise stocks with "China" in their names rose collectively, with 24 directly hitting the daily limit. However, the technology stocks that were popular for a period of time were collectively silent, and many high-standard stocks even fell sharply.

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This uneven market made many stock investors exclaim that they couldn't understand it. Some people say that this is the Central Bank "protecting the market" for state-owned enterprise reform, and some people think it is the market style that is changing. But what is the truth?

Can 500 billion yuan really save A-shares?

To be honest, 500 billion yuan sounds a lot. But when looking at the entire A-share market, is this amount of money really enough?

You know, on March 10th, the transaction volume of the Shanghai, Shenzhen, and Beijing markets reached as high as 2160.9 billion yuan. Although it was 805.6 billion yuan less than the previous day, it is still an astronomical figure. In front of this scale, how much effect can 500 billion yuan really play?

Moreover, the 500 billion yuan is not directly injected into the stock market. It is through the SFISF tool to provide liquidity support to securities companies, fund companies, and insurance companies. After these financial institutions get the money, will they all use it to buy stocks? I'm afraid not necessarily.So, relying solely on these 500 billion yuan to save the A-shares might be a bit wishful thinking.

"China Special Valuation" VS "Tech Valuation": Who is the future of A-shares?

The most interesting aspect of this market trend is the divergence between "China-headed" state-owned enterprise stocks and technology stocks. The former are collectively rising, while the latter are collectively retracing. Does this mean that the market style is about to shift from "Tech Valuation" to "China Special Valuation"?

To be honest, I think this claim is a bit premature. After all, a day's market trend cannot represent a long-term trend. Moreover, both state-owned enterprises and technology companies are important components of China's economy. It seems inappropriate to set them against each other.

However, this divergence does reflect a change in investor sentiment. After the recent technology stock frenzy, many people have started to re-examine the value of traditional industries. Especially against the backdrop of the continuous advancement of state-owned enterprise reform, some undervalued "China-headed" stocks do have the possibility of being revalued.

But this does not mean that technology stocks have no investment value. After all, technological innovation is still an important driving force for the transformation and upgrading of China's economy. It's just that when choosing technology stocks, it may be necessary to be more cautious and pay more attention to the fundamentals of the companies.

Don't try to guess the central bank's intentions.

To be honest, every time I see the central bank introducing new policies, I feel like an idiot. It's clearly to help the market, so why make it so complicated? Can't we just inject funds directly into the stock market?

But upon careful reflection, the central bank's operations also have their rationale. Directly injecting funds into the stock market may lead to more problems, such as inflation and asset bubbles. By using indirect methods like SFISF, it can provide liquidity support to the market while avoiding direct intervention in market operations.

However, the effectiveness of such operations still needs to be tested by time. After all, the stock market is a complex system participated by countless investors, and it cannot be reversed by a single policy.The stock market carries risks; investment should be approached with caution.

Reflecting on last year's "China Special Valuation" trend and looking at the current market, I can't help but feel a sense of nostalgia. The stock market is truly a magical place, always filled with uncertainty.

At this time last year, who could have imagined that "China" prefixed stocks would become the darling of the market? And now, who can guarantee how long this trend will last?

Therefore, whether it's "China Special Valuation" or "Science and Technology Special Valuation," I believe we should not blindly follow the hype. The most important thing is to look at the fundamentals of the companies and their long-term development potential.

Of course, this is just my personal opinion. After all, I am just an ordinary retail investor, not a professional investor. However, I feel that in this rapidly changing market, staying clear-headed and rational is more important than anything else.

The stock market carries risks; investment should be approached with caution. This old saying may sound a bit cliché, but it is indeed the truth. No matter how the central bank operates, we are still responsible for our own financial well-being.