Convertible bonds are now batch circuit breaker! Institutions say it is difficult to continue the speculation of individual coupons

 Convertible bonds are now batch circuit breaker! Institutions say it is difficult to continue the speculation of individual coupons

It is worth noting that the crazy market of convertible bond market has continued for many days

On October 21, convertible bonds continued to be hot, with Wanli convertible bonds, Jiuzhou convertible bonds, Xintian convertible bonds, blue Dun convertible bonds, start-up convertible bonds, Shangrong convertible bonds and other convertible bonds were temporarily suspended. The turnover rates of Henghe convertible bond and Shenglu convertible bond exceeded 3600%, and the turnover rate of Wanli convertible bond, Kailong convertible bond, Blue Shield convertible bond and molded convertible bond exceeded 2000%.

The craziest one is the Blue Shield convertible bonds. From last Friday, up to today, in just five trading days, the cumulative increase is nearly 180%, and the conversion premium rate is as high as 217.3%.

Blue Shield Co., Ltd. announced on the 21st that the company is not a quantum technology concept stock which is popular in the market recently, and the company has not carried out market business in the field of quantum technology and has no relevant business income. Moreover, not long ago, Blue Shield announced that the company, some subsidiaries and the controlling shareholders of the company, Ke Zongqing and Ke Zonggui, were included in the list of persons to be executed for breach of trust, which is commonly known as Lao Lai. Some bank accounts and assets of the company have been frozen / sealed up by the court because the litigation related matters have been applied for property preservation before litigation.

Bohai Securities said that the main subject of this convertible bond boom is still small market value individual bonds, and some of the early target has experienced a round of speculation. At the beginning of May this year, with the announcement of mandatory redemption of Taijing convertible bonds, it had a significant impact on the market speculation of convertible bonds. There are generally two conditions for compulsory Redemption: one is that the stock price rises to 130% of the transferred stock price in at least 15 consecutive trading days for 30 consecutive trading days, and the other is that the circulating quantity is less than 30 million yuan. Therefore, we should be alert to the convertible bonds with high price and low circulation.

Since this year, a total of 98 convertible bonds have entered the period of stock conversion, among which 40 companies have issued the announcement of no early redemption of convertible bonds. Some companies may issue the announcement of no early redemption of convertible bonds in the early stage, but issue the mandatory redemption announcement in the later stage, so we should pay attention to the risk of individual bonds that meet the mandatory redemption conditions.

On the other hand, with the implementation of the new regulations on convertible bonds on October 26, it may not be conducive to the continuation of the speculation of individual convertible bonds. On July 24 this year, the Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively issued the notice on the appropriateness management of investors of convertible corporate bonds issued to unspecified objects: since October 26, ordinary investors participating in the subscription and trading of convertible bonds shall sign the disclosure of investment risks of convertible corporate bonds issued to unspecified objects in paper or electronic form. The notice mainly supervises the authority of trading convertible bonds.

Source of this article: Yang Bin, editor in charge of CFA_ NF4368