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Fuel for the Bull Market—China Premium

Apr 18-2013   



 

—On the Thematic Speech by FANG Quan at the Investment Salon of BiMBA Financial Club

By CUI Aibo

 

On November 11th, FANG Quan, Deputy Director of “Securities Market Weekly”, delivered a thematic speech entitled “Fuel for the Bull Market—China Premium” at Wanzhong Building of China Center for Economic Research (CCER) in Peking University. This salon was part of the series of lectures and speeches jointly organized by BiMBA Financial Club and BiMBA Alumni Office. As a journalist, Mr. FANG witnessed the vicissitudes of Chinese stock market in the past 15 years and has developed his unique insight into the trend and internal impetus of this market. The lecture lasted for two and a half hours, and Mr. FANG, a BiMBA alumnus, conducted in-depth exchange and discussion on this topic with the 100 plus BiMBA students present at the salon. Since the stock market has become the focus of attention recently, this timely lecture was warmly received. The stock market has soared from 1000 points to 6000 points. Will this bullish trend continue?  If yes, what is the impetus to push up the market to 10000 points and even the expected level of 30000 points in the upcoming years? How did he reach this conclusion? Mr. FANG analyzed the issue from four aspects.

 

Policy—The Dominant Factor in Chinese Equity Market

 

“The most striking feature of Chinese equity market is that it is still a policy-oriented market.”

 

This feature means that the rise or fall of Chinese stock market in a given period is largely decided by government policies. Government policy is the major factor for researching, observing and even trading stock shares. It is true that the stock market of China may become completely marketized several years later, and its rise and fall will then be decided by the value law of the market. But at present, or at least during the past 15 years, no matter before the split-share reform (initiated on May 1st, 2005) or after it, government policy has always played a dominant role in the development of the stock market.

The most recent policy factor to decide the trend of the stock market has been the official statement that Premier WEN Jiabao made in Hong Kong the other day, “We should prevent the stock market from rising or falling drastically, and we should adjust the market with market-oriented measures.” Then, with what measures? Mr. FANG Quan pointed out two possible measures: One is to adjust the supply-demand relationship; the other is to investigate and punish, with more or less rigor appropriate to the situation and purpose, the illegal behaviors during a particular period. But the former is the major means. For example, the recent fall of the market to 5300 points and the ensuing stagnation have resulted from adjustment of the supply-demand relationship, namely, issuing more shares while tightening money supply. Mr. FANG further mentioned a number of measures to constrain fluidity already employed by the government, including stopping issuance of new funds, ordering the suspense of the marketing of existing funds, and requiring the fund companies to control their positions. Obviously, the government factor is still playing the dominant role. Now people wonder how long this adjustment policy will last. Mr. FANG’s speculation was that it will continue until the market comes down around 5000 points near the end of the year. For the expected stock index futures will be introduced on December 28th, the last trading day of this year, and the stock index is supposed to be maintained at a low level, say 5000 points, to ensure room for their growth.

 

 “To research the policies, we should start with the formation process of Chinese polices,” continued Mr. FANG. He made a detailed retrospective description of the history of Chinese stock market from 1990 to 2007 and the process of its evolving into a policy-oriented market. “Initiated by non-government organizations but supported by the government”, the stock market of China was created in 1988. China Securities Market Research and Design Center was officially established on March 15th, 1989, and the Shanghai and Shenzhen exchanges were set up in December 1990, mainly as a banner to demonstrate to the international community China’s determination to continue its reform and opening-up campaign after the June 4th Incident in 1989. Though only 12 companies were listed on the two exchanges and the mechanism of limit up and limit down was adopted, their establishment was nonetheless a breakthrough. Though established mainly as a banner to show the government’s attitude, the exchanges gained their own impetus to grow and, as the bad things escaping Pandora’s Box, became hard to control. The stock investment rush of 1991 and 1992 became a disputable topic, and people doubted whether the exchanges were socialist or capitalist, of which the conclusion would determine their survival.

 

 “What is a securities market? Observation is allowed, but the trial must continue. Should the trial fail, it can be closed down, either incompletely or completely.” With this statement made during his 1992 Southern China Inspection Tour, former Chinese leader DENG Xiaoping defined the two-year old stock exchange market as a trial. Following that, with the courage and passion of one who “had escaped death by a hair’s width”, Mr. WEI Wenyuan, General Manager of Shanghai Stock Exchange, launched great efforts to develop the exchange and realized its rapid expansion between 1992 and 1993.

As Chinese economy realized “soft landing”, the stock market of the country embraced its first major bull market in May 1996. As the stock market developed, the government paid more and more attention to it and got ever more worried about how to control it. Thus haltering the stock market became part of macroeconomic regulation. In response to an editorial of the People’s Daily that expressed this opinion directly, the market dived all along from over 1200 points to 900 points.

 

 “Public ownership has multiple forms, including the stock system.” With this statement in the documents of the 15th CPC congress, Chinese government completed the trial of securities market and began to regard it as an important part of its socialist market economy. Current Premier ZHU Rongji pointed out that the securities market should serve to help the state-owned enterprises to walk out of their difficult conditions. From December 1997, many state-owned enterprises began to seek funds on the stock market. Due to the excessive fundraising demands, the stock market never recovered its vigor until 1999. In that year, to pursue its faster and healthier development, the government opened the stock market and the People’s Daily published another editorial, which stated that “The growth of the current stock market is recovering growth”, and “the stock market, thanks to its regulation for a number of years, now has had the basis for long-term steady development”, so “all participants of the market should deeply cherish this hard-won good situation”. Hence staged the second bull market, which lasted from 1999 to 2001 and, just as expected, helped the state-owned enterprises to walk out of their difficulties. After that, however, the government took on a new task—to get the nation ready for an aging society, and to that end, sold part of the state-owned equity to enrich the social security fund. This “blood-letting” brought the market down from 2145 points to 998 points on April 30th, 2005.

 

The split-share reform, initiated in May 2005, fundamentally harmonizes the interests of the major shareholders and the small investors. Equity premium and appraisal of market capitalization brought the market up from 998 points to over 6100 points of last week. During this process, the stock market is becoming a fully normal market. Mr. FANG Quan said that the concept of “floatable market capitalization” will be outdated in 3 years because all market capitalization is floatable at the time. 

 

Judging from the formation process of Chinese policies toward the stock market in the past 17 years, we can conclude that government policy, at least for the time being, is still the dominant factor to influence the market.

 

The Value of Constants—China’s Overwhelming Economic Growth

 

“The securities market of China is a new and transforming market.”

 

And the investment value of this market indeed lies in the two words, “new” and “transformation”. The market is new because China is a developing country and its economic value will continue to grow at high rates. During the past 30 years, the GDP of China has been growing by an average rate of 10% per year, but the stock market has not yet reflected this rapid growth. This situation will be changed, anyway, after accomplishment of the split-share reform. Since the stocks of newly listed companies are all floatable, the backbone enterprises in all economic sectors are expected to be traded on the equity market. Such a market will more accurately reflect our high-speed economic growth.

 

The economy of China is destined to continue to grow at a high speed, which is the fundamental impetus for the equity market of this country. As Professor LIN Yifu reasoned during his lecture entitled “China Miracle”, Chinese economy is expected to continue its fast and steady growth during next 20 to 30 years. Mr. FANG, using ICBC as an example, speculated on the future high-speed growth of Chinese economy. As the bank’s reform accelerates and reaches a greater depth, it has achieved surprising growth. Having a market capitalization over 1 trillion yuan, ICBC realized an annual growth of 46%, which deserves no description less proud than “China Miracle”. For another example, the listed companies achieved a 64% growth in the 3rd quarter, of which 3/4 occurred in their main business. The economy will grow fast, as people expect, so the P/E ratio of Chinese stock market will turn out much lower in the future. What’s more, another factors also points to that direction—appreciation of RMB.

 

The regulated RMB appreciation is also playing an important role in economic development. Professor HAI Wen believed that the appropriate exchange rate between RMB and USD should be 1/4 to 1/5. That is, there is further room for RMB appreciation. The equity market will be a major beneficiary, second only to the real estate industry. Another factor is the population dividend. The book The Next Great Bubble Boom predicts that the U.S. stock market will soar from 7000 points to 40000 points based on the population dividend. Similarly, till 2015, the middle-aged population, which is most competent in value creation, will account for a very large proportion. Thus the population dividend will greatly advance the economic development of the nation. Finally, Mr. FANG discussed a factor unique to China that will also greatly boost the economy, namely, the reform of the systems in this country.

 

The Value of Variables—the Fundamental Impetus of Next Bull Market

 

“Why is transformation the impetus behind the premium? Because the transformation is the process of fully integrating the major forces of China.”

The variables are valuable because they are the impetus behind the transformation. Marketization, ownership clarification, and privatization are embodied in the split-share reform on the equity market. This reform influences the market as whole as well as every enterprise and stock. The room for value increase resulting from such transformation is hardly explainable by the stock evaluation methods prevailing in the West.

 

Then, how powerful is the impetus provided by the transformation? Mr. FANG elaborated on this topic. First, the transformation means that many enterprises owned by the central government will be fully included into the equity market. IPOs aside, the existing 300 listed enterprises will integrate their main business operations, and their mother companies are expected to infuse into these subsidiaries excellent assets. “Asset infusion and full listing will be the impetus to support the bull market in next period”, of which the curtain has already been raised this year. At present, compared with their counterparts in the mature markets, the listed companies, especially those dominated by state ownership, are still awkward in management structure and impotent in profitability. But infusion of excellent assets will undoubtedly raise their profitability. Therefore, plus other systematic reforms, there will be immense impetus for growth of the listed enterprises directly owned by the central government. “Monopoly leads to profit.” As long as IPO is still subject to administrative control, explained Mr. FANG, any stock on the verge of perish has the hope of rebirth. Consequently, the fund-wielding hands are destined to stir the market.

 

Besides the asset infusion and full listing of the enterprises owned by the central government, there are still several other factors to push forward the market. For example, introduction of the fair value notion into the accounting system has led to revaluation of many stocks, and the enterprises owned by the central government, with asset infusion accomplished, will engage in international acquisition, and thus lead to further rediscovery and reappraisal of their value.

 

How to choose investment-oriented stocks? At the end of this part of his speech, Mr. FANG introduced three principles for analyzing the stock profitability: (1) Consider the enterprise’s promise for split-share reform; (2) Investigate to see whether the mother company has lots of unlisted excellent assets; and (3) Analyze the recent reports.

 

The International Factor—Deluge of International Hot Money

 

“The U.S. dollar is destined to step down from the altar,” said the book The War of Currency.

 

During the 20th century, the U.S. dollar all along dominated the world and remained overvalued. The U.S. dollar is destined to step down from the altar, and what does this imply? In this case, the 4 trillion dollars of hedging funds of the world will definitely withdraw from the dollar-denominated assets, and turn to favor gold and petroleum. But Mr. FANG thought that there exist limits to gold price climbing because it is impossible for the world to return to the Gold Standard. Similarly, the rise of oil prices will accelerate the birth of its substitutes.

 

Then, what can guarantee sustainable growth? China arrested the eyes of these hedging funds. Therefore, international hot money has begun to fill its portfolios with more Chinese assets. Because the mainland market of China is not open, so Hong Kong stocks have absorbed the zeal and become hot. Mr. FANG thought that the “Hong Kong Stocks Through-Train Program” does not work, because the main force to push up the Hong Kong stock market has been international hot money. In the future, international hot money is expected to increase its ownership of Chinese assets.

 

For the stock market, it is meaningless to classify the trading behavior into “investment” and “speculation”, or is there constant difference between “value-based” and “non-value-based” practices. To a certain extent, the stock market depends on “funds + psychology”, the fundamental determinants for the stock prices in a given period.

 

At last, Mr. FANG concluded his speech with a quotation:

 

“In many cases, what has changed is not the matter itself but the way to treat it. Regardless of the hype of others, so far we can distinguish between the constants and the variables, we can effectively cope with, and also benefit from, market changes.”

 

After the speech, the host presented Mr. FANG with a souvenir on half of the sponsor, BiMBA Financial Club. Then the enthusiastic students had active exchanges with Mr. FANG Quan, during which he patiently answered their questions about issues like QDII and the current situation of the stock market. The lecture drew to a successful end in this heated atmosphere.

 

A Brief Introduction of BiMBA Financial Club

 

BiMBA Financial Club was founded in 2005 by QU Jianfeng together with other alumni of F05, with an aim to erect a platform of study and exchange for BiMBA alumni, where the graduated alumni and the in-school students can learn from each other and jointly research the development of the financial industry of China from both the practical and theoretical perspectives. Now the 06MBA alumni have taken over the management of the Financial Club, and this investment salon was the first salon organized by them.

Fuel for the Bull Market—China Premium

Apr 18-2013   



 

—On the Thematic Speech by FANG Quan at the Investment Salon of BiMBA Financial Club

By CUI Aibo

 

On November 11th, FANG Quan, Deputy Director of “Securities Market Weekly”, delivered a thematic speech entitled “Fuel for the Bull Market—China Premium” at Wanzhong Building of China Center for Economic Research (CCER) in Peking University. This salon was part of the series of lectures and speeches jointly organized by BiMBA Financial Club and BiMBA Alumni Office. As a journalist, Mr. FANG witnessed the vicissitudes of Chinese stock market in the past 15 years and has developed his unique insight into the trend and internal impetus of this market. The lecture lasted for two and a half hours, and Mr. FANG, a BiMBA alumnus, conducted in-depth exchange and discussion on this topic with the 100 plus BiMBA students present at the salon. Since the stock market has become the focus of attention recently, this timely lecture was warmly received. The stock market has soared from 1000 points to 6000 points. Will this bullish trend continue?  If yes, what is the impetus to push up the market to 10000 points and even the expected level of 30000 points in the upcoming years? How did he reach this conclusion? Mr. FANG analyzed the issue from four aspects.

 

Policy—The Dominant Factor in Chinese Equity Market

 

“The most striking feature of Chinese equity market is that it is still a policy-oriented market.”

 

This feature means that the rise or fall of Chinese stock market in a given period is largely decided by government policies. Government policy is the major factor for researching, observing and even trading stock shares. It is true that the stock market of China may become completely marketized several years later, and its rise and fall will then be decided by the value law of the market. But at present, or at least during the past 15 years, no matter before the split-share reform (initiated on May 1st, 2005) or after it, government policy has always played a dominant role in the development of the stock market.

The most recent policy factor to decide the trend of the stock market has been the official statement that Premier WEN Jiabao made in Hong Kong the other day, “We should prevent the stock market from rising or falling drastically, and we should adjust the market with market-oriented measures.” Then, with what measures? Mr. FANG Quan pointed out two possible measures: One is to adjust the supply-demand relationship; the other is to investigate and punish, with more or less rigor appropriate to the situation and purpose, the illegal behaviors during a particular period. But the former is the major means. For example, the recent fall of the market to 5300 points and the ensuing stagnation have resulted from adjustment of the supply-demand relationship, namely, issuing more shares while tightening money supply. Mr. FANG further mentioned a number of measures to constrain fluidity already employed by the government, including stopping issuance of new funds, ordering the suspense of the marketing of existing funds, and requiring the fund companies to control their positions. Obviously, the government factor is still playing the dominant role. Now people wonder how long this adjustment policy will last. Mr. FANG’s speculation was that it will continue until the market comes down around 5000 points near the end of the year. For the expected stock index futures will be introduced on December 28th, the last trading day of this year, and the stock index is supposed to be maintained at a low level, say 5000 points, to ensure room for their growth.

 

 “To research the policies, we should start with the formation process of Chinese polices,” continued Mr. FANG. He made a detailed retrospective description of the history of Chinese stock market from 1990 to 2007 and the process of its evolving into a policy-oriented market. “Initiated by non-government organizations but supported by the government”, the stock market of China was created in 1988. China Securities Market Research and Design Center was officially established on March 15th, 1989, and the Shanghai and Shenzhen exchanges were set up in December 1990, mainly as a banner to demonstrate to the international community China’s determination to continue its reform and opening-up campaign after the June 4th Incident in 1989. Though only 12 companies were listed on the two exchanges and the mechanism of limit up and limit down was adopted, their establishment was nonetheless a breakthrough. Though established mainly as a banner to show the government’s attitude, the exchanges gained their own impetus to grow and, as the bad things escaping Pandora’s Box, became hard to control. The stock investment rush of 1991 and 1992 became a disputable topic, and people doubted whether the exchanges were socialist or capitalist, of which the conclusion would determine their survival.

 

 “What is a securities market? Observation is allowed, but the trial must continue. Should the trial fail, it can be closed down, either incompletely or completely.” With this statement made during his 1992 Southern China Inspection Tour, former Chinese leader DENG Xiaoping defined the two-year old stock exchange market as a trial. Following that, with the courage and passion of one who “had escaped death by a hair’s width”, Mr. WEI Wenyuan, General Manager of Shanghai Stock Exchange, launched great efforts to develop the exchange and realized its rapid expansion between 1992 and 1993.

As Chinese economy realized “soft landing”, the stock market of the country embraced its first major bull market in May 1996. As the stock market developed, the government paid more and more attention to it and got ever more worried about how to control it. Thus haltering the stock market became part of macroeconomic regulation. In response to an editorial of the People’s Daily that expressed this opinion directly, the market dived all along from over 1200 points to 900 points.

 

 “Public ownership has multiple forms, including the stock system.” With this statement in the documents of the 15th CPC congress, Chinese government completed the trial of securities market and began to regard it as an important part of its socialist market economy. Current Premier ZHU Rongji pointed out that the securities market should serve to help the state-owned enterprises to walk out of their difficult conditions. From December 1997, many state-owned enterprises began to seek funds on the stock market. Due to the excessive fundraising demands, the stock market never recovered its vigor until 1999. In that year, to pursue its faster and healthier development, the government opened the stock market and the People’s Daily published another editorial, which stated that “The growth of the current stock market is recovering growth”, and “the stock market, thanks to its regulation for a number of years, now has had the basis for long-term steady development”, so “all participants of the market should deeply cherish this hard-won good situation”. Hence staged the second bull market, which lasted from 1999 to 2001 and, just as expected, helped the state-owned enterprises to walk out of their difficulties. After that, however, the government took on a new task—to get the nation ready for an aging society, and to that end, sold part of the state-owned equity to enrich the social security fund. This “blood-letting” brought the market down from 2145 points to 998 points on April 30th, 2005.

 

The split-share reform, initiated in May 2005, fundamentally harmonizes the interests of the major shareholders and the small investors. Equity premium and appraisal of market capitalization brought the market up from 998 points to over 6100 points of last week. During this process, the stock market is becoming a fully normal market. Mr. FANG Quan said that the concept of “floatable market capitalization” will be outdated in 3 years because all market capitalization is floatable at the time. 

 

Judging from the formation process of Chinese policies toward the stock market in the past 17 years, we can conclude that government policy, at least for the time being, is still the dominant factor to influence the market.

 

The Value of Constants—China’s Overwhelming Economic Growth

 

“The securities market of China is a new and transforming market.”

 

And the investment value of this market indeed lies in the two words, “new” and “transformation”. The market is new because China is a developing country and its economic value will continue to grow at high rates. During the past 30 years, the GDP of China has been growing by an average rate of 10% per year, but the stock market has not yet reflected this rapid growth. This situation will be changed, anyway, after accomplishment of the split-share reform. Since the stocks of newly listed companies are all floatable, the backbone enterprises in all economic sectors are expected to be traded on the equity market. Such a market will more accurately reflect our high-speed economic growth.

 

The economy of China is destined to continue to grow at a high speed, which is the fundamental impetus for the equity market of this country. As Professor LIN Yifu reasoned during his lecture entitled “China Miracle”, Chinese economy is expected to continue its fast and steady growth during next 20 to 30 years. Mr. FANG, using ICBC as an example, speculated on the future high-speed growth of Chinese economy. As the bank’s reform accelerates and reaches a greater depth, it has achieved surprising growth. Having a market capitalization over 1 trillion yuan, ICBC realized an annual growth of 46%, which deserves no description less proud than “China Miracle”. For another example, the listed companies achieved a 64% growth in the 3rd quarter, of which 3/4 occurred in their main business. The economy will grow fast, as people expect, so the P/E ratio of Chinese stock market will turn out much lower in the future. What’s more, another factors also points to that direction—appreciation of RMB.

 

The regulated RMB appreciation is also playing an important role in economic development. Professor HAI Wen believed that the appropriate exchange rate between RMB and USD should be 1/4 to 1/5. That is, there is further room for RMB appreciation. The equity market will be a major beneficiary, second only to the real estate industry. Another factor is the population dividend. The book The Next Great Bubble Boom predicts that the U.S. stock market will soar from 7000 points to 40000 points based on the population dividend. Similarly, till 2015, the middle-aged population, which is most competent in value creation, will account for a very large proportion. Thus the population dividend will greatly advance the economic development of the nation. Finally, Mr. FANG discussed a factor unique to China that will also greatly boost the economy, namely, the reform of the systems in this country.

 

The Value of Variables—the Fundamental Impetus of Next Bull Market

 

“Why is transformation the impetus behind the premium? Because the transformation is the process of fully integrating the major forces of China.”

The variables are valuable because they are the impetus behind the transformation. Marketization, ownership clarification, and privatization are embodied in the split-share reform on the equity market. This reform influences the market as whole as well as every enterprise and stock. The room for value increase resulting from such transformation is hardly explainable by the stock evaluation methods prevailing in the West.

 

Then, how powerful is the impetus provided by the transformation? Mr. FANG elaborated on this topic. First, the transformation means that many enterprises owned by the central government will be fully included into the equity market. IPOs aside, the existing 300 listed enterprises will integrate their main business operations, and their mother companies are expected to infuse into these subsidiaries excellent assets. “Asset infusion and full listing will be the impetus to support the bull market in next period”, of which the curtain has already been raised this year. At present, compared with their counterparts in the mature markets, the listed companies, especially those dominated by state ownership, are still awkward in management structure and impotent in profitability. But infusion of excellent assets will undoubtedly raise their profitability. Therefore, plus other systematic reforms, there will be immense impetus for growth of the listed enterprises directly owned by the central government. “Monopoly leads to profit.” As long as IPO is still subject to administrative control, explained Mr. FANG, any stock on the verge of perish has the hope of rebirth. Consequently, the fund-wielding hands are destined to stir the market.

 

Besides the asset infusion and full listing of the enterprises owned by the central government, there are still several other factors to push forward the market. For example, introduction of the fair value notion into the accounting system has led to revaluation of many stocks, and the enterprises owned by the central government, with asset infusion accomplished, will engage in international acquisition, and thus lead to further rediscovery and reappraisal of their value.

 

How to choose investment-oriented stocks? At the end of this part of his speech, Mr. FANG introduced three principles for analyzing the stock profitability: (1) Consider the enterprise’s promise for split-share reform; (2) Investigate to see whether the mother company has lots of unlisted excellent assets; and (3) Analyze the recent reports.

 

The International Factor—Deluge of International Hot Money

 

“The U.S. dollar is destined to step down from the altar,” said the book The War of Currency.

 

During the 20th century, the U.S. dollar all along dominated the world and remained overvalued. The U.S. dollar is destined to step down from the altar, and what does this imply? In this case, the 4 trillion dollars of hedging funds of the world will definitely withdraw from the dollar-denominated assets, and turn to favor gold and petroleum. But Mr. FANG thought that there exist limits to gold price climbing because it is impossible for the world to return to the Gold Standard. Similarly, the rise of oil prices will accelerate the birth of its substitutes.

 

Then, what can guarantee sustainable growth? China arrested the eyes of these hedging funds. Therefore, international hot money has begun to fill its portfolios with more Chinese assets. Because the mainland market of China is not open, so Hong Kong stocks have absorbed the zeal and become hot. Mr. FANG thought that the “Hong Kong Stocks Through-Train Program” does not work, because the main force to push up the Hong Kong stock market has been international hot money. In the future, international hot money is expected to increase its ownership of Chinese assets.

 

For the stock market, it is meaningless to classify the trading behavior into “investment” and “speculation”, or is there constant difference between “value-based” and “non-value-based” practices. To a certain extent, the stock market depends on “funds + psychology”, the fundamental determinants for the stock prices in a given period.

 

At last, Mr. FANG concluded his speech with a quotation:

 

“In many cases, what has changed is not the matter itself but the way to treat it. Regardless of the hype of others, so far we can distinguish between the constants and the variables, we can effectively cope with, and also benefit from, market changes.”

 

After the speech, the host presented Mr. FANG with a souvenir on half of the sponsor, BiMBA Financial Club. Then the enthusiastic students had active exchanges with Mr. FANG Quan, during which he patiently answered their questions about issues like QDII and the current situation of the stock market. The lecture drew to a successful end in this heated atmosphere.

 

A Brief Introduction of BiMBA Financial Club

 

BiMBA Financial Club was founded in 2005 by QU Jianfeng together with other alumni of F05, with an aim to erect a platform of study and exchange for BiMBA alumni, where the graduated alumni and the in-school students can learn from each other and jointly research the development of the financial industry of China from both the practical and theoretical perspectives. Now the 06MBA alumni have taken over the management of the Financial Club, and this investment salon was the first salon organized by them.