An Analysis Of The Exchangeable Bond' Influence On The Liquidity Of The State-owned Capital

The Third Central Committee of the Eighth Central Committee of the Communist Party of China(CPC)decided to set up a number of state-owned capital operation companies,which act as a platform between government and state-owned enterprises.The state-owned capital operation company plays the role of manager of state-owned capital to solve the historical problems left by the reformation of state-owned capital and enhance the state-owned capital's ability of preservation and appreciation and improve liquidity.This paper studies the capital operation of state-owned capital and explores the new ideas of the development of state-owned capital operation companies.This paper is divided into four parts.The first part expounds the basic concept of state-owned capital,as well as the current scale and effectiveness of China's state-owned capital,then explains the meaning of state-owned capital liquidity,describes the shortcomings of the flow of state-owned capital,and explores the main causes of the formation of these problems;the second part introduces the theoretical basis of exchangeable bonds.Including the conceptual definition and characteristics of exchangeable bonds,the mechanism of exchange of bonds promoting the liquidity of state capital,as well as the comparation with other liquidity tools;The third part is a case study,which explains the basis of the case selection,and then introduces the issue and listing process of "15 Guo Sheng EB".Next is analysis of the issue effect of "15 Guo Sheng EB".On the one hand,the issuance of "15 Guo Sheng EB" improved the financial indicators of Guosheng Group,reduced the financing cost,optimized the enterprise debt maturity structure and improved the efficiency of capital use.This indicates that the issuance of exchangeable bonds has increased the capital liquidity of Guosheng Group.On the other hand,the issuance of "15 Guo Sheng EB" can improve the state-owned equity structure and promote the circulation of state-owned capital in the securities market.Then the risk of the issuance of exchangeable bonds is supplemented;the fourth part of this paper is the conclusion and suggestion.Through the above research,this paper draws some conclusions:First,the liquidity of China's state-owned capital is not adequate,mainly as follows:state-owned enterprises have high debt ratio and less available funds;the loss of state-owned capital;state-owned shares' reduction has obstacles.The main reason whichis left by China's economic reform are the property rights are not clear,the state-owned equity structure is irrational,and state-owned enterprises have single ways of fianacing.Second,through the issuance of exchangeable bonds,the company's financial performance has improved,especially the company's solvency has been improved,which promoting the circulation of funds.If successful conversion comes true,the operating company will be able to achieve the reduction of state-owned shares,and ease the impact on the market;Third,the issuance of exchangeable bonds is also accompanied by the risk: the operational risks of the company because of the macroeconomic environment,economic cycle and other factors,the risk of state ownership not being successfully reduced,abnormal fluctuations in the stock market.In view of the possible risks of issuance of exchangeable bonds,this paper puts forward some countermeasures in the final proposal.On the one hand,the operating companies have to design the bond terms reasonably before the issuance of the bonds to achieve the purpose of the company.On the other hand,the company should enhance the risk prevention ability,improve the supervision and guidance to the operation of the company and the subject of the company,raise the efficiency of funds,so that the exchange of bonds can promote the liquidity of state-owned capital to the maximum.