Study On The Relativity Between The Bond Market And Stock Market And The Countermeasures

Thesis studies the relativity between the bond market and stock market, based on the conclusion and induction of of the theory of the capital market and financial markets, reviews and describes the development of the bond market and stock market, analysis the principle of mutual relations between the bond market and stock market factors influencing the volatility of bond market and stock market, establishes the conceptual analysis frame, use empirieal tests to verify the theoretical hypotheses in a quantitative method, finds that there was non-coordination between the bond market and stock market, some regulation measures and strategies are given to deal with the non-coordination problem between the bond market and stock market. Research findings and policy suggestions are concluded in the end. The following is the basic conclusions in the thesis:1 By analysing the development situation of the bond market and stock market, we can see that the bond market and stock markets have long-term development, but development is not stable and regular, the stock market has experienced a long-term low price. the latest two years, the stock index increased in a substaintial and fast rate, this situation partially provoked by the Government's economic policies and the sustained and rapid development. But there is no such evident relativity between he rising stock market and the listed company's financial situation, the increased share price did not reflect the company's operating efficiency, on the contrary, it induced the inatsbility of the capital and financial market. As to the bond market, government and financial bonds were in a greater part of the bond market, and the issuances of the bonds were planned, the market-oriented process should be speeded up in the future. We can conclued, the track of the development in the bond market was evidently different contrasted to the stock market.2 Low-risk bonds and high-risk stock are complementary in investment combination, and the bond market and stock markets are interactional, mutual effects on each other. As the capital can circulate between the bond market and stock exchange, changes of some economic variables such as money supply, interest rates, reserve ratio, would arose to fluctuation in the bond market and stock market volatility.In theory, the coordinated development of the bond market and the stock market, can effectively educe the systemic financial risks, to improve the financial markets. 3 Thesis comparative analyses the bond index and the stock index, the unit root test and cointegration analysis index of the revised sequence show, hypothesis that the bond index and the stock index are relative can not be accepted. There is no long-term equilibrium relationship between the two markets, variance decomposition test and granger causality test also shows that the two markets are independent, they didn'tinteract to each other. Retrospect from a longer period, the correlation between the stock market and bond market are random, the conclusion is different from previous studies.4 Correlation between the bond market and stock market is interrelated to the government policies and acts. China's securities market has been a mixed system of planned economy and market economy, the change and adjustment of financial market system and the government policy could influence stocks and bonds by effecting capital circulation. At the same time, investors in bond markets and stock markets have different preference and objective, it is difficult to form a large-scale active capital. Co-ordination development between the bond market and stock market bring imbalance to the financial market, and the bond market is far from integrative, which makes against to the healthy development of domestic enterprises.5 According to demonstration analysis of correlation between the bond market and stock market and the empirical results of the analysis of the causes and impact, thesis makes some feasible suggestions: establish the bond yield to maturity as the benchmark interest rates, to educe risk caused by the market-oriented reform; promote the development of the diversification of financial products and market actors, establish a scientific and effective system of bond rating, and promote the development of corporate bonds; utilize the platform of inter-bank market, to develop a network of municipal bonds; expand investment channels, to promote coordinated development between the bond market and stock market.