On May 19, Yongji convertible bonds were suspended for verification. Previously, Yongji convertible bonds recorded the largest increase on the first day of listing, which attracted the attention of the Shanghai Stock Exchange. In addition to Yongji convertible bonds, only the intraday rise of convertible bonds this week triggered the temporary stop. Experts remind that the current overall valuation of the convertible bond market is still at an all-time high. Investors should pay attention to risks and invest rationally.
more than convertible bonds rose sharply and temporarily stopped during the session
On May 17, Yongji convertible bonds rose 276.16% to 376.16 yuan on the day of listing, which was the largest increase on the first day of listing of new convertible bonds.
On May 18, Yongji convertible bonds rose sharply again, rising to 436 yuan and closing at 390.96 yuan. On the 17th and 18th, the total increase was more than three times. The sharp rise of Yongji convertible bonds has attracted the attention of the Shanghai Stock Exchange. On the morning of the 18th, the Shanghai Stock Exchange announced that individual investors raised the price of Yongji convertible bonds during the trading process, and the Shanghai Stock Exchange suspended the trading of relevant accounts.
On May 19, Guizhou Yongji Printing Co.Ltd(603058) announced that in view of the recent large fluctuations in the price of the company’s convertible corporate bonds, in order to safeguard the interests of investors, upon the application of the company, the trading of the company’s convertible corporate bonds will be suspended for verification since the opening of the market on May 19, 2022.
Yongji convertible bond is a more prominent example of the “trading tide” of individual convertible bonds recently. According to incomplete statistics by the reporter of China Securities Journal, individual bonds in the convertible bond market have triggered temporary stops about 18 times since this week. Among them, there are newly listed convertible bonds such as yongdongzhuan 2 and Yaoshi convertible bonds, which respectively rose by 30% on the first day of listing to trigger the temporary stop. There are also several times of new convertible bonds such as aggregate convertible bonds and ALA convertible bonds to trigger the temporary stop for many times.
convertible bond features bring hot market
Why is the convertible bond market so hot? According to the analysis of insiders, convertible bonds have both equity and debt. Even when the price of positive shares falls, the decline range of convertible bond price is limited due to the support of pure debt bottom, showing the characteristics of “retreat and defense”, which makes many investment institutions regard it as an option to avoid risks in severe market fluctuations.
“In the early stage of the sharp decline in the equity market, convertible bonds showed good resistance to decline.” China Industrial Securities Co.Ltd(601377) Zuo Dayong, chief analyst of fixed income, said that under the loose liquidity environment, the problem of “lack of assets” in fixed income still exists, and the demand for convertible bonds driven by “fixed income +” is still high.
“The premium rate of convertible bonds rose passively during the decline of positive stock prices, and although some high-quality convertible bonds were adjusted, the capital was not significantly reduced. At the same time, the market capital was abundant and high-quality assets were scarce.” Haitong Securities Company Limited(600837) chief fixed income analyst Jiang Peishan said.
In addition, the individual bonds in the current round of convertible bonds are more small-scale convertible bonds, indicating that there is the possibility of hot money speculation in the hot market of this round of convertible bonds, and the sharp rise in prices can attract follow-up profits. For example, the issuance scale of Yongji convertible bonds is 146 million yuan, and the scale of aggregate convertible bonds, ALA convertible bonds and other bonds is also between 200 million yuan and 400 million yuan.
the overall valuation is at an all-time high
Insiders suggest that there is a high risk of a sharp rise in some convertible bonds without the support of positive stock prices.
Gf Securities Co.Ltd(000776) chief fixed income analyst Liu Yu suggested that the overall valuation center of the convertible bond market is still at an all-time high.
Zuo Dayong believes that with the increase of convertible bond targets and institutional expansion, the structural problem of convertible bond positioning has become more and more prominent. The rise in the valuation of high rated and large-scale convertible bonds is relatively small; The listing positioning and valuation of large-scale secondary new bonds are low. In addition, in the rebound of convertible bonds at the end of April, many high-quality growth convertible bonds rebounded too fast, overdrawing the follow-up elasticity.
For subsequent convertible bond investment, Citic Securities Company Limited(600030) co chief economist Mingming suggested that the trading opportunities of cyclical varieties under the main line of steady growth still exist and are expected to continue until the credit conditions improve.
