What happened behind the collapse of convertible bonds

Pick up the money and ask for money

2024-07-01 12:18The official account of the official account of the pomegranate inquiry account

In the past period, the excess decline in the convertible bond market has aroused everyone's attention.

Last week, the weekly decline of the convertible bond sector hit a 19-year high, and the number of bonds falling below the bottom hit a 21-year high.

Because in the past few years, many financial self-media have recommended a large number of convertible bonds, and the holdings of retail investors are not small.

Let's talk about it today.

01

In the past ten years, convertible bonds have actually been very different in the highly competitive market of A-shares.

For customers, the essence of convertible bonds is debt + call options, with a lower limit of debt floor protection and a call option chasing upper limit.

For listed companies, it is a very cheap financing tool, compared with traditional financing methods such as bonds and loans, as long as they pay the price of diluting stocks.

Therefore, the two sides reached a consensus: both retail investors and listed companies want to convert shares, even if the stock price falls, it would be good for the listed company to revise the stock price downward, after all, it is impossible for listed companies to take out real money to repay debts.

Based on the above game logic, transferable is supported by a very reliable "debt base".

This is definitely the most harmonious asset in the past 20 years in China's securities market, the relationship between retail investors and listed companies, no routines, no harm.

02

But all that, in May and June, changed completely.

Insert a sentence here, Lao Nan repeatedly mentioned in "How to Manage Money in the Second Half of 2024" that the investment framework of the past few decades has all changed, and you must not work backwards linearly, otherwise you will die a miserable death.

This convertible bond is a typical case.

This variable is the "National Nine Articles", with the ultimate positioning of A-shares from "financing market" to "return market" and "dividend market", the liquidation of junk stocks has been strengthened.

Some listed companies with low prices, low market capitalization, losses, and financial fraud are facing delisting. The company is going to be delisted, so what else is there to repair.

This directly led to a complete change in the logic of the previous convertible bonds.

03

For example, "China Loading Transfer 2" has fallen from a high of more than 120 last year to about 30 recently.

The underlying stock "ST in Pack" has fallen below 1 yuan, and there is a possibility of delisting.

The balance of transfer shares is 1.1 billion, and the market value of the underlying stock is 800 million, and the balance of the transfer is greater than the market value of the underlying stock.

If the listed company exercises the right to revise the stock price downward, it will only accelerate the decline and delisting of the underlying stock.

Therefore, the large decline in this bond conversion is basically concentrated in low ratings, which you can simply understand as a listed company with such and such problems.

Many of them, like "China Loading Transfer 2", have the risk of delisting at face value and high pressure on stock transfer. Before, because the delisting threshold was low, everyone could tolerate it.

Now that the delisting threshold is strict, the risk of delisting really exists, and the "debt bottom" that was unbreakable before no longer exists.

Of course, it is not that convertible bonds cannot be touched, but the requirements are higher, and the real return to the depth of the listed company, rather than the previous closed-eye buying.

knot

In this complex cycle, try not to have the idea of betting on a single asset, a single strategy; Don't think that if an asset has had good returns in the past few years, it will be just as good to work backwards into the future.

The non-standard trust in the past few years, and today's convertible bonds are essentially the same, and the risk is extremely high in the complex cycle.

Decentralized allocation, multi-asset, multi-strategy, and multi-cycle can resist complex cycles.

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