The Core Of A Shares Is Not Mandatory Dividends.

Recently, Professor Liu Shuwei's article entitled "restoring the basic functions of China's stock market" has attracted widespread attention and has aroused controversy.

The most important point in the paper is that the stock issuers and the directors of the board of directors can limit their cash holdings. First, the average annual dividend yield is not less than the risk-free return rate for ten consecutive years; the two is that the average cash dividends in the ten consecutive years are no less than the direct financing of the stock market.

If the regulatory authorities can really achieve such a high profile, it will be too good to be true.

However, Professor Liu's proposal is not in line with the reality of the A share market, and its threshold is relatively high.

Although this is able to limit the reduction of stock issuers and supervisors, a large number of enterprises will be able to meet this requirement. How many companies are willing to issue IPO? A step further, it is not necessary to develop China's capital market.

But even so, skyrocketing and plummeting is still a problem.

It is normal for investors to remain confident that the stock market can not form long-term confidence.

Last year, the A share market launched a "roller coaster" trend, the stock market first round of mad bull market, after mid June, only a few trading days fell into a bear market, and eventually the stock market crash, the market volatility and the subsequent collapse of the tragic degree, also for A shares since the birth of rare.

This is another trend of A shares rising and falling, which is another repetition of its related history.

The securities market has three main functions, namely financing, asset pricing and resource allocation. Besides, it must also take into account the investment function.

Otherwise, the capital market that has lost investment function is meaningless.

However, the financing function of the A share market is often brought to the extreme, and the investment function is often "marginalized".

In fact, this is also one of the root causes of the A share market's failure to resume its normal basic functions.

Behind it, in essence, is the positioning of the A share market.

In fact, Liu Shuwei's proposal is only a "forced dividend" board.

The "standardized" dividends of listed companies are reflected in many rules and regulations promulgated by the regulatory authorities.

As early as in December 2004, the China Securities Regulatory Commission issued the "Regulations on strengthening the protection of the rights and interests of the public shareholders", calling for the implementation of a positive profit distribution method for listed companies, and the revision of the regulations issued in 2008.

The decision on certain provisions of cash dividends has even linked the refinancing of listed companies with cash dividends. In May 2012, the China Securities Regulatory Commission issued a notice on further implementation of matters related to cash dividends of listed companies, and intends to further take measures to enhance the returns of listed companies to shareholders.

With the continuous improvement of system construction and the attention of regulatory authorities, dividends of listed companies are much more active than before.

Another core issue that needs to be solved urgently is investor protection.

As with cash dividends, regulators, while protecting investors, are willing to pay lip service.

Protection is not doing well.

In fact, investor protection is a systematic project, involving multiple departments, and it needs more attention from regulators.

But unfortunately, for investors protection, we see more slogans, the form of protection is far greater than the connotation.

Investors' interest protection is not in place, it can not be confident in the market, and the stock market is becoming "normal".

Therefore, China's capital market only solves the problem of market positioning and investor protection, and its basic functions can be brought into full play. This is the real "save the market" move.

And the issue of cash dividends is only a "branch" of market positioning and investor protection.

Has solved the problem of market orientation and investor protection, and is afraid that the basic functions of the market will not be effectively restored?