Data· Equity· Bond

China’s issue of convertible bonds reached RMB 289 bln, exceed IPOs

minutes 2019/12/22 10:25:59
convertible bonds, IPO financing, China

Dec 22, 2019 (China Knowledge) - 16-20 Dec, more than 10 convertible bonds were issued in China, reaching a record high in a single month. Especially on Dec 16, when four were issued simultaneously, a rare case in A-share market, triggering this year's scale of convertible bond issued to surpass IPOs.

Statistics shows that from the beginning of the year to Dec 20, 137 convertible bonds were issued, with a total scale of RMB 289.879 bln, and those of IPO recorded lower sum of RMB 248.3 bln. Among all the convertible bonds, four of which are issued by banks that contributed nearly 47% of the total sum, adding up to RMB 136 bln.

In previous years, the issuance of convertible bonds had never exceeded RMB 100 bln. In 2017, the CSRC tightened the policy on private placement of shares, ushering enterprises to adapt convertible bonds for fundraising, which greatly increased the issuance scale, with the number of convertible bonds issued added up to 53, reaching RMB 94.967 bln.

Analysts and market observers pointed out that the supply of convertible bonds at year-end is usually large. With the recent active trading of A-shares and large of foreign investments via the HK Stock Connect, investors' expectation for the stock market to continue on an upward swing has warmed up investors' interests in convertible bonds.

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