Convertible bonds reappear crazy speculation operation, said the market or end in a week

category:Finance
 Convertible bonds reappear crazy speculation operation, said the market or end in a week


Why is the fusing tide staged again?

Since October, the convertible bond market has recovered, especially this week, with the soaring turnover rate of convertible bonds, some bonds have skyrocketed. First, on October 20, under the leadership of Blue Shield convertible bonds, many convertible bonds rose sharply, and 13 convertible bonds were triggered to fuse. That night, Blue Shield shares, Shenglu communication and molding technology released trading risk tips.

As for the sudden rise of convertible bonds recently, Zhang Yiye, the fund manager of Shanghai Chunda asset management company, told reporters of the first finance and economics that this round is similar to the wave in March, because the stock market investment sentiment is not good and the funds are huddled to keep warm, so as to jointly push up the small-scale convertible bonds.

This also reflects from the side, the funds of speculation never disappeared, just waiting for the opportunity. A senior practitioner in the convertible bond market told the reporter that the current round of convertible bond market is soaring, and hot money speculation is a big factor, followed by the use of specific themes.

The senior practitioners also added that another reason is that the market liquidity is abundant. At present, the direction of the stock market is not clear, the bond market is expected to be tight, and the excessive profit seeking funds in the market have turned to the convertible bond market with better liquidity and t + 0 trading, especially those small-scale convertible bonds, which are easy to control for large funds.

Yu Jingwei, chief asset allocation analyst of CITIC Securities, also told reporters that there is no clear hot spot in the equity market at present, and funds need a flow direction. There is no limit on the rise and fall of convertible bonds and intra day revolving trading provide convenience.

Compared with the sharp rise in March, the two rounds of convertible bond market have the characteristics of market profit-seeking fund speculation, and both of them are based on concept themes, especially this round. For example, in March, we mainly focused on the concept of epidemic situation, and this round of topics was more, such as 5g, new energy, consumption, medical treatment and quantum technology. It should also be noted that the rise in March is a repair factor after the impact of the epidemic, and the sudden rise and speculation of small cap convertible bonds is even more serious.

It is not difficult to find that the bonds with higher growth rate are mainly convertible bonds with bond balance (i.e. scale) of 100 million or 100-200 million. At present, this kind of convertible bonds are easy to control. In the case of group rush, retail investors and speculative sentiment are relatively strong. However, such convertible bonds have been substantially out of the basic theoretical price range, so it is necessary to be cautious in participating. Zhang Yiye said.

In addition to the bond balance, some senior practitioners also concluded that this kind of convertible bonds has the following characteristics: first, the price is high, mainly the absolute price is high, the conversion value is generally more than 130 yuan, and the premium rate of individual convertible bonds to equity is also high; second, the turnover rate is high, and the daily turnover rate is as high as several times, which is regarded as the typical characteristics of hot money t + 0 trading; the third is to take Shenzhen GEM as an example In addition, most of these convertible bonds are not rated high, generally at AA - level or below.

Be alert to the risks behind the boom

Although the convertible bond market is still rising, the consensus in the industry is that the deviation between convertible bonds and stocks will eventually return, which is only a matter of time. When asked how long this wave of market will last, Zhang Yiye told first finance and economics that regulation may soon intervene and the market may end in a week.

Yu Jingwei also said that at present, speculators are racing against time. If there is an early redemption of the subject matter in the midway, the return process of the convertible bond market will be accelerated. When the hype went out in March, it was a mess. This wave was bigger and riskier.

For investors, in this wave of soaring, also need to guard against the risk of forced redemption. Generally speaking, there are two conditions for the company to make compulsory Redemption: one is that the stock price rises to 130% of the transferred share price in at least 15 consecutive trading days for 30 consecutive trading days; 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.

Industry insiders remind that investors should first make clear their own capacity to bear losses, and should not blindly follow the wind and avoid convertible bonds with high prices and high conversion premium rate; identify convertible bonds with high price but low conversion premium rate; if the principal shares have good fundamentals, they can be allocated appropriately, but the allocation proportion should be determined according to their own bearing capacity.

In fact, the market is also paying attention to the trend of regulation. Zhang Yiye told reporters from China first finance and economics that when the convertible bonds were hyped in March, the regulatory authorities did monitor such speculation, but at that time, the key work items of supervision were information disclosure, self inspection of listed companies and investor education, and no public punishment was given to specific individuals or institutions. According to historical experience, in the short term, supervision should raise the issue of early warning again, and the speculation in the market will be restrained.

However, there are also views that, from the perspective of supervision, in order to intervene in the market, it is not expected to introduce tough measures such as restricting trading and price, which may be started from the following aspects: first, strengthen supervision and audit and increase punishment, and focus on monitoring the major shareholders who have priority in allotment, institutions or individuals with high positions, and accounts with frequent transactions, so as to monitor various differences The second is to advocate the concept of value investment, stabilize institutional investors, prevent individual institutions from following the trend of speculation, and urge institutional investors to monitor and report abnormal information to individual customers; the third is to disclose the risks of individual investors and strengthen the propaganda of convertible bond knowledge.

It is worth mentioning that recently, a number of securities companies have sent investors the requirement to sign the investment risk disclosure statement of convertible corporate bonds issued to unspecified objects (hereinafter referred to as risk disclosure statement), which is earlier than the regulatory time. Investors can only participate in the innovation and trading of convertible bonds after signing the risk disclosure statement. This may be due to the relatively high risk of the convertible bond market in the near future, coupled with regulatory requirements, so the institutions have issued one after another. On July 24 this year, the Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively issued the notice on the appropriateness management of investors in convertible corporate bonds issued to unspecified objects. The notice said that since October 26, ordinary investors participating in the purchase and trading of convertible bonds should sign risk disclosure statements in paper or electronic form. Some market participants believe that 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 convertible bonds. Zhang Yiye mentioned that the content of the risk warning letter is consistent with the risk warning part of the prospectus of convertible bond issuance, and the supervision aims to eliminate the investment risk problems caused by information asymmetry through this form. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

It is worth mentioning that recently, a number of securities companies have sent investors the requirement to sign the investment risk disclosure statement of convertible corporate bonds issued to unspecified objects (hereinafter referred to as risk disclosure statement), which is earlier than the regulatory time. Investors can only participate in the innovation and trading of convertible bonds after signing the risk disclosure statement. This may be due to the relatively high risk of the convertible bond market in the near future, coupled with regulatory requirements, so the institutions have issued one after another.

On July 24 this year, the Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively issued the notice on the appropriateness management of investors in convertible corporate bonds issued to unspecified objects. The notice said that since October 26, ordinary investors participating in the purchase and trading of convertible bonds should sign risk disclosure statements in paper or electronic form. Some market participants believe that 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 convertible bonds.

Zhang Yiye mentioned that the content of the Risk Reminder is consistent with the risk prompt part of the prospectus for convertible bonds issuance. The purpose of supervision is to eliminate the investment risk problems caused by information asymmetry through this form.