270 billion!Listed companies crazy grab, public funds crazy buy, this variety why popular?
China’s convertible bonds are becoming A share investment should not be ignored.In 2021, the issuance scale of convertible bonds in the whole market reached 277.167 billion yuan, exceeding 250 billion yuan for three consecutive years, and the primary market continued to boom.The market of convertible bonds in the secondary market is even more amazing. The CSI convertible bond index rose by 17.32%, and the historical valuation reached a high level.With the booming market, public offering funds and other institutions also buy more and more. In 2021, huitanfu convertible bonds and Penghua convertible bonds reached 11.422 billion yuan and 10.187 billion yuan, becoming the only two public offering convertible bond funds in history.According to market analysis, the convertible bond market in 2022 is still worth paying attention to, but the current valuation level of the convertible bond market is high, so it is necessary to reduce the return expectation of the market in this year. The market style may be more balanced, combined with high prices and high valuations. This year, further fine selection of bonds is needed, and the market of individual bonds may be more important.”Convertible bond” has become a hot word in financing for listed companies.From 2019 to 2021, convertible bond issuance will reach 275 billion yuan, 261.2 billion yuan and 285.7 billion yuan, respectively, according to Wind data.The financing scale of convertible bonds in the A-share refinancing market has also increased from about 1% before 2017 to about 30% in 2021.The “outbreak” of cb market is also closely related to regulatory policies.On February 15, 2017, the China Securities Regulatory Commission adjusted its refinancing policy, raising regulatory requirements for private placement, while encouraging listed companies to refinance through other products such as convertible bonds.Since then, the development speed of other refinancing products represented by convertible bonds has improved significantly.”The advantage of convertible bonds is that, like rights issue, shareholders have the priority to be allocated, and compared with rights issue, convertible bonds also have lower cost and are more friendly to minority shareholders,”An investment banker told China securities Reporter that for large financial enterprises such as banks, financing is a necessary option, but major shareholders do not want to lose control, so it is an inevitable choice to replace “private placement” with convertible bonds.In fact, for listed companies, issuing convertible bonds also avoids the loss of additional issuance of shares at a low price. Issuers of convertible bonds pursue stock issuance at a higher price through conversion premium.”For some small and medium-sized enterprises, the business may still be in the stage of rounding up the land, the company’s stock price is low, it is not cost-effective to issue additional shares, through the issuance of convertible bonds, after the stock price rises in the next few years to complete the conversion, indirectly realize the high price of stock issuance.The investment is also close to buying a call option with a guaranteed interest rate, which can also make a good return.”The investment banker said.However, with the increase of market recognition and market capacity, cb is no longer a “customized” product for small and medium-sized enterprises, and many enterprises also complete their super-large-scale financing through CB.In 2021, five of the top ten a-share refinancing projects are convertible bond projects.In 2021, the average financing amount of a single convertible bond project is about 2.506 billion yuan, significantly higher than the average financing amount of a single private placement project of 1.478 billion yuan.Specifically, in 2021, industrial Bank will issue the largest single cb with 50 billion yuan, followed by Bank of Nanjing and Bank of Shanghai with 20 billion yuan, Oriental Wealth with 15.8 billion yuan, and Bank of Hangzhou with 15 billion yuan.In 2021, the CSI convertible bond index rose 17.32%, outperforming the annual increase of 3.91% of The Shanghai Composite Index, 7.95% of the GEM index and -6.21% of the CSI 300 index.In the continuous rise of convertible bonds, institutional investors represented by public funds are also buying in large quantities.Released from Shanghai in Shanghai, the convertible bond holder structure of convertible bonds mainly hold for general fund, pension, insurance, legal person, natural person, brokerage, proprietary and brokers information technology products, including general corporate market value of convertible bonds and funds hold super billions, pension, insurance, a natural person value of convertible bonds held in more than 20 billion,The market value of proprietary trading and asset management products held by securities firms is more than 10 billion.From the perspective of investor structure changes, funds and annuities have greatly increased their holdings of convertible bond products.At the end of 2021, fund investors increased their holdings of convertible bonds by about 39.2 billion yuan, or 55.90%, compared with the beginning of the year.Annuity investors increased their holdings of convertible bonds by about 8.9 billion yuan from the beginning of the year, an increase of 40.44%.Convertible bond public offering funds of 10 billion yuan scale also appeared.The 2021 annual report data disclosure, under the support of the outstanding performance of the convertible bond market, the scale of Huitanfu convertible bond and Penghua convertible bond in the fourth quarter of 2021 increased by 2.508 billion yuan and 2.553 billion yuan respectively to 11.422 billion yuan and 10.187billion yuan.In this regard, Deppon Securities macro interest rate group leader Xu Liang analysis, because the convertible bond is both equity and debt, it is more attractive to public funds, especially fixed income + products.It is a long-term trend for public offering funds to gradually increase the holding scale of convertible bonds, and improving bond investment is also an important aspect for public offering funds to enhance their competitiveness.For the cb market, the investment style of public offering fund is stable and the investment system is sound, and the scale growth of public offering fund participation in cb market is conducive to the reasonable pricing of cb market.”In the past three years, the convertible bond and convertible bond market has brought obvious profit effect, especially compared with pure bonds, especially credit bonds, the performance ratio is outstanding, resulting in the continuous allocation and inflow of capital into the market.At the same time, there are more targets in the cb market, and the expansion of the market provides more bids to choose from.”Ming Ming, chief economist of Citic Securities, told the Brokerage China reporter that the increase in the allocation of public funds can further increase the transparency and attention of the market, and also has a good impact on market liquidity, but at the same time, the inflow and outflow of funds may also be a source of market price volatility.Zhang Yiye, convertible bond strategy fund manager of Chunda Fund, told China Securities Broker: “In 2021, the increase of convertible bond index is the highest among all kinds of assets in equity and fixed income market, and the increase of returns of publicly raised funds is obvious, whether due to year-end ranking or actual returns, it is bound to increase the allocation of convertible bonds.As the largest fund category in the market, fixed income funds in the duration and credit sinking strategy is difficult to play a big role, the allocation of convertible bonds has become a winner.”Zhang Yiye believes that, looking ahead to next year, the allocation willingness of institutions has not significantly subsided, the demand will remain high;In terms of supply, the reserve amount of cb issued in 2022 will be about 150, and the supply scale is limited in the short term. Therefore, the trend of cb market being pursued by funds is still going on.Individual investors are also sufficiently enthusiastic about convertible bonds.Take new bond application as an example. By the end of 2021, the average online application volume of single convertible bond reached an astonishing 10 trillion yuan, and the online success rate of convertible bond was significantly lower than that of new shares, becoming the most favored equity financing variety by online investors.As the price continues to rise and the capital continues to pour in, the valuation of cb also increases. The market once prevailing to eliminate “100 yuan bonds”, the face value of convertible bonds is usually 100 yuan, that is, it is difficult to find convertible bonds whose price is lower than the face value in the market.The valuation of convertible bonds also came to a record high.As of the end of 2021, the overall net bond premium rate of shanghai-Shenzhen convertible bonds was 31.54 percent, according to Wind data.In 2020, the index was adjusted back, and by January 28, 2022, it had risen to 28.96%, but it was still at a historical high.”There are three reasons for the overall higher valuation of cb market last year. First, under the influence of the new asset management regulations and the downward performance ratio of interest rate bonds and credit bonds throughout the year, the allocation desire of wealth management children and fixed income + funds increased, and cb was pursued by the ‘fixed income +’ strategy funds.Moreover, in terms of supply, due to the difficulty of issuing convertible bonds and the cyclical effect, it is difficult to meet the allocation demand, which pushes up the overall valuation level to some extent.Finally, the decline in strong redemption willingness of cb issuers also provides a basis for the existence of high price + high premium rate of CB.”Therefore, the current high valuation of cb is structural and not completely bubble, zhang said.The market for each sector of the rising expectations still maintain a certain rational.Even with a subsequent pullback in the hot sector, there is limited scope for valuation compression.Zhang Yiye said that the structural market in 2022 or will be a large probability event.Among them, the need to guard against slowing economic growth, external liquidity tightening and other negative signals.The market is expected to bottom out gradually in the first quarter, the digestion of policies will follow the market rhythm slowly up;Meanwhile, under the influence of supply and demand in the whole market, the trend of cb market continues to be hot.It is recommended to pay attention to the reasonable valuation and the industry with favorable policies.Regarding the market, it clearly believes that: “The current valuation level of the cb market is at the absolute high level since the expansion of the market in 2017, and the valuation level of both the overall valuation level and the stock range of cb has been rising in the past year.The high valuation level reflects investors’ high expectations for the market, but also brings some risks.Further considering that the overall price of cb market is also at a high level, the potential risk of high valuation is further increased at this time.””In 2022, the cb market is still worthy of attention, but the current high valuation level of the CB market, we need to lower the earnings expectations of the market in this year, and we need to further guard against high volatility caused by high valuation.Positive stocks are still the main driving force of the cb market throughout the year. The market style may be more balanced with high prices and high valuations. This year, further fine selection of bonds is needed, and individual bond market may be more important.”Yao said.Xu Liang also believes that the current valuation of cb is relatively expensive, and the premium rate of the overall CB is at a historical high. In 2022, the overall cb market will not be good, but the structural market will still exist.The phenomenon of the overall valuation of cb may appear in 2022. It is suggested to take the cb with low valuation as the target and select the track and clause games, such as infrastructure construction, pig cycle track and the game of stock price downward revision.