Convertible Bonds At A Discount Cause Analysis And Comparison

As financial derivatives,convertible bonds have characteristics of debt and shares. In foreign financial markets, serving as an important financial intermediaries, convertible bonds meet the needs of financing and investment. However,convertible bonds in chinese market is still in the development stage. The issue of chinese convertible bonds market facing the smaller scale of issue,the relatively narrow industry distribution,the deficiencies of term design,the higher ratio of stock conversion, and so on. At the same time, Considering its huge financing advantages and investment potential, it,s still worthy of our attention and researching, which is conducive to the effective operation and development of chinese capital market growth. Therefore, the study of the phenomenon and its influencing factors of chinese convertible bonds is of great significance and practical value.The author selected 12 samples of convertible bonds in Shanghai-listed and Shenzhen-listed, extracting the data of transactions in day time, from November 3, 2010 to January 13, 2015. Taking advantage of the data, the author made empirical analysis to the research of convertible bonds,price. It is found that the discount of convertible bonds is widespread. According to the empirical analysis of four factors to the discount, we found that the remaining period, the conversion value ratio, and BM ratio was positively correlated with undervalued rate, the proportion of tradable A shares is negative correlated with undervalued rate of convertible bonds. In addition, according to the multiple regressions of big and small kinds of convertible bonds samples, we find that the remaining period and BM ratio have different efficiency in the undervalued rate, then the author made some analysis and interpretation to this phenomenon.