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88彩票在线客服:Taiping Fund: Is the convertible bond a clear stream of investment and security?

时间:2018/6/27 18:48:52  作者:  来源:  浏览:0  评论:0
内容摘要: The stock market fluctuates and loses. You are a conservative investor. When the stock market entered a high point, you did not get involve...

The stock market fluctuates and loses. You are a conservative investor. When the stock market entered a high point, you did not get involved. Fortunately, finally waiting for the stock market to go through a period of decline, has been sideways for some time, so you decided to buy the bottom, the results ... ... copied in the hillside. Seeing that the assets of the account have fallen, and they are not willing to take a short position, the lamenting of people is not as good as the calculation of the day, and it is awkward.

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So, sadly, you left the stock market and considered transitioning to the bond market to obtain definitive income. However, due to the loss of the previous period stocks, you would want to return the debt through the return of the bonds, but it will be far in the future.

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Well, is there an asset that can fall like a bond and has limited space, but also has a lot of room to rise like stocks? Today, the author popularizes the bond varieties for everyone - convertible bonds .

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What is a convertible bond?

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Convertible bonds, short for convertible corporate bonds, or convertible bonds, are special corporate bonds that can be converted into common stocks at specific times and under certain conditions. Convertible or non-conversion is your right, convertible bonds have the characteristics of both bonds and stocks.

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Investing in its core logic is to find protected stocks. The convertible bond is firstly a kind of bond. It has the characteristic of a bond, that is, it repays the principal and interest at the time of maturity. Therefore, based on the maturity of the bond with the maturity of the bond, the price calculated is the bottom of the bond. When the price falls below the bottom of the bond, we can choose to hold it until maturity, so that in the absence of a credit default (in the country's convertible bond market has not yet occurred), the principal and interest are still available, so the downside is limited. And what is more beneficial, because investors all know that there is a bottom of the bond, when the convertible bond is lower than this price, someone will buy it, so in fact we don’t need to wait until the expiration date and the price will return to the bottom of the bond. the above.

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Of course, the protection of bonds at the end depends on the rational actions of investors. Then you say that even if you fall below the bottom of the bond, nobody buys it. What if the convertible bond falls? This refers to another clause -- the terms of the sale sale. Investors have the right to sell the convertible bonds back to the issuer when they are lower than the return sale price. For example, during the conversion period, if the closing price of the stock of the company is close to 70% of the current conversion price within 20 consecutive trading days within the conversion period, the convertible bond can be converted. The holder is entitled to convert all or part of the convertible bonds it holds to 103%, 104%, 105%, and 106% of the face value of the convertible bonds within one year, two years, three years, and four years respectively. (including interest for the current period) sold back to the company. The holder of the convertible bond can exercise the right to sell back once a year. After the conditions for resale are satisfied for the first time, if the sale is not implemented for the first time, the right to resell the sale shall not be exercised in the year.”

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Features of convertible bonds

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After understanding the convertible bonds bond and the return to the bottom of the sale, let's look at the stock of convertible bonds. The convertible bond price is highly correlated with the underlying stock price. On the one hand, the right to convert convertible bonds determines the correlation between the two. In addition, China’s convertible bond issuers have large-scale impulses, and most of China’s convertible bonds have ended in conversions.

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Figure 1: CSI 300 and convertible bonds on the Shanghai index trend

88彩票在线客服:Taiping_Fund:_Is_the_convertible_bond_a_clear_stream_of_investment_and_security?

shares of convertible bonds for general use to measure the conversion premium, the lower the conversion premium rates, the stronger the shares of convertible bonds. Conversion premium refers to the cost of buying a convertible bond and then converting to a share that exceeds the price of the underlying stock.

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For example, the price of the International Trade Convertible Bonds is 122.3 yuan, the conversion price is 8.8100 yuan, the denomination is 100 yuan, and the issuance price is 10.28 yuan:

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Conversion premium rate = 122.3/(100/8.81*10.28)-1=4.8116%.

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It is possible to judge the shareability and debtability of the convertible bonds based on the level of the conversion premium rate. Strong stocks, with large correlations with positive stock movements; strong debts, low risks, but low returns.

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Consider the following situation:

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The secondary market bought convertible bonds. When the stocks fell, the convertible bonds also fell, resulting in a loss of shares. At this time, in order to avoid losses, is it possible to only hold the due date and obtain principal and interest? the answer is negative. Because at this time, the issuer will often lower the conversion price, reduce the cost of conversion, reduce the conversion premium rate, and attract investors to convert shares. This is because the issuer is motivated by the conversion of shares in order to avoid debt pressure. At present, the vast majority of China's convertible bond market has been converted to end.

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For example, the China Capital Markets Convertible Bonds (Delisted) Prospectus stipulates: “In the continuation period of this A Share Convertible Bond, when the company’s stock has a closing price of at least 10 trading days out of any consecutive 30 trading days, the closing price is lower than At the time when the conversion price of the current share is 90%, the board of directors of the company has the right to propose a downward revision of the conversion price and submit it to the company's general meeting of shareholders for consideration. The proposal must be passed by more than two-thirds of the voting rights held by the shareholders attending the meeting. At the time of voting at the conference, the shareholders holding the A share convertible bonds of the company should be evaded, and the revised share price should not be lower than the average price of the company’s A shares trading on the 20 trading days before the date of the general meeting of shareholders. The average trading price of the company's A-share stocks in the previous trading day, and at the same time, the revised conversion price must not be lower than the latest audited net asset value per share and stock par value.” In August 2014, the China Southern Ocean Convertible Bonds met the downward adjustment. The conversion price clause will reduce the conversion price from 8.60 yuan/share to 6.24 yuan/share.

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Of course, the issuer also sets redemption terms in order to protect their own interests. For example, the “smooth model convertible bond” stipulates: “conditional redemption terms: During the conversion period, when any one of the following two situations occurs, the company has the right to decide to redeem all or part of it at the face value of the bond plus the interest accrued for the current period. Non-convertible convertible corporate bonds: A. In the conversion period, if the company’s stock’s closing price on at least fifteen trading days out of any consecutive thirty trading days is not less than 130% of the current conversion price (including 130 %); B. When the nominal amount of the unconverted shares of the convertible bonds issued this time is less than RMB 30 million (including RMB 30 million), if the conversion price adjustment occurs within the aforementioned 30 trading days, On the trading day before the adjustment, the conversion price before the adjustment and the closing price are calculated, and the adjusted trading day is calculated based on the adjusted conversion price and closing price.” From June 5, 2017 to July 14, 2017 At the same time, the auto convertible bond triggered the redemption terms.

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It can be seen that the convertible bond is a bond that has a bond bottom and a back-to-sell base, with a relatively large upside. (See Figure 2)

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Figure 2: shares and convertible bonds of debt sources

88彩票在线客服:Taiping_Fund:_Is_the_convertible_bond_a_clear_stream_of_investment_and_security?

information: "low-risk investment road"

building a portfolio

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know the measure of yield to maturity of bonds and shares of measure conversion premium rate, you can build your own portfolio of.

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This step of investment strategy came from time to time. Like other assets, choose the appropriate investment target based on your risk preference.

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If you are a conservative investor, you can increase the proportion of convertible bonds with strong debts; if you are optimistic about the rising potential of certain convertible bonds, you can configure convertible bonds with stronger stocks; secondly, reasonable By using the bond bottom and back-to-sale protection of the convertible bonds, the convertible bond market is classified into defensive and balanced according to the position of the bonds and the volatility of the underlying stock within the bond bottom and the top redemption interval. , offensive configuration convertible bonds, according to the rise and fall of the stock market, adjust the corresponding proportion. For example, the proportions of defensive, balanced and offensive are set to 30%, 50%, and 20%, which can be attacked and defended, and the strategy is flexible.

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In summary, the convertible bonds are both deterministic in nature and have the offensive nature of the stock. Due to the fact that China's convertible bond issuers have the urge to convert shares, they often end up with a conversion, which is a very attractive investment.


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