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Research On The Liquidity Of Enterprise Bonds Market

Posted on:2004-05-24Degree:MasterType:Thesis
Country:ChinaCandidate:J XiaFull Text:PDF
GTID:2156360092991413Subject:Finance
Abstract/Summary:PDF Full Text Request
The enterprise bonds market had perfect issuance and transactions system and substantial bonds product in the mature securities market, and it had become the major component of its securities market. But if you review China's enterprise bonds market, you will find the market scale, system and the bonds product, all of these can not compare with the mature enterprise bonds market, and it also can not compare with China's stock market. The paper analyzes the factors that limited the development of China's enterprise bonds market, and the conclusion that the liquidity is one of the major factors which limiting the development of China's enterprise bonds market can be drew from it. Then the paper on the basis of the theory of securities market liquidity and the successful experiences of the mature market, points out the problem of the liquidity of China's enterprise bonds market and its causes. At last, the paper puts out the idea of enhancing the liquidity of China's enterprise bonds market.Part I introduces the concept of the enterprise bond, the difference and the relationship of the enterprise bond with the corporate bond, and points out in this paper the concept of the enterprise bond inclusive of the corporate bond. Then the paper introduces the concept of liquidity brought forward by some scholars, and generalizes two concepts of the liquidity. One concept is that liquidity is the capacity that securities can be transacted in a low trade cost. Another concept can be indicated that liquidity is desideration that the provision side will supply the direct transaction in a low trade cost in line with demand side.The market liquidity is very important to the securities market's development, and its basic role is to reset and optimize allocate the capital resource. The market lack of liquidity will lose the existent basic and it will be difficult to exchange in it. This is because the liquidity is one of the key factors that affect high efficiency and stabilization of the market and the major condition under which the market can attract the investors, especially the institution investors. The high liquidity of enterprise bonds market can draw issuer to issue enterprise bonds, enlarge the sort of bonds and trade object while it will be difficult to stimulate the reform of the enterprise bonds market short of liquidity.The measurement criterion of liquidity often contains width, depth> resiliency and impact. In China's enterprise bonds market, there only is rialto market, lack of OTC market. Therefore, on the basis of the actuality of market and the tendency of development, the paper puts out two ways of quantitative analysis of liquidity. One is quota-driven system for the OTC market, and the other is the bid-driven system for the rialto market.The paper analyzes the factors which affect the market in the part II. Five major factors can affect the market's liquidity, such as exchange system, exchange cost, market transparency, the behavior of the participators and the bond products structure. The exchange system can affect the liquidity by acting on the process of the enterprise bonds price forming. The exchange system contains quota-driven system and bid-driven system, and the different systems offer different liquidity at the some market. Moreover, the credit exchange also affects the liquidity. Generally speaking, if the market permits credit exchange it will improve the market's liquidity, otherwise it'll debase the market's liquidity. The exchange cost contains the implicit cost and explicit one. The exchange cost can affect the investor's activity of exchanging. The lower the exchange cost, the higher activity the investor's exchange behavior, and the higher liquidity of the market. The influences of the market transparency are very complex. The general point is that if the market in a low transparency improves the level it will improve the market's efficiency, and it will improve the market's liquidity. But even if the market in a over-transparency situation improves transparency, it will debase the...
Keywords/Search Tags:enterprise bond, enterprise bond market, liquidity, exchange mechanism
PDF Full Text Request
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