On corporate bonds: bonds, new ideas

Financial products is not very abundant in the era, in addition to bank savings, the bonds is undoubtedly the most popular investment vehicles. Now with the gradual improvement of the financial market environment, innovative financial products, financial products, insurance, investment products, funds , stocks, futures, trust, brokerage trust management, and so on, "you Changba me on stage." But these opponents of the joint sights, the bonds of the "charm" is still not diminished. The main reason is its principal investment safe, fixed-term investments, fixed income investment products of these three simple design features to meet the majority of investment were intended to avoid volatile investment market psychology.

As the bonds market supply and demand imbalance, each hundreds of billions of government debt is often the first day in the market were sold out within hours. More and more difficult to buy the bonds, forcing We have to seek new areas of investment. In fact, the bonds is a simple design features a total of bond type of investment product characteristics, it is just one of many debt products, but the highest credit bonds, the safest. In fact, bonds of "family" there are other varieties of bonds, its been "indulging" in the bond investment, the better to convert an idea, consider corporate bonds.

Bond product "family"

Subject to the standard bond issuance, bonds can be divided into three categories: the highest credit debt, credit debt and moderate financial corporate bonds with lower credit in China, the main issue for the bond, the requirements of regulatory authorities are strictly so-called "low credit" of corporate bonds, in fact, its strength must be very strong, and to go through a professional credit rating agency ratings and bond principal and interest to provide third-party guarantee, "credit is low" is relative in the first two terms.

Currently, individual investors can step in debt products, including: bonds, book-entry treasury bonds, corporate bonds and general corporate convertible bonds, bonds issued by financial institutions only for institutional investors for more than four varieties of bonds, a simple comparison situation (see Table).

We can see that: in terms of product safety, investors can rest assured that even if the company issued bonds to pay crisis occurred, there is commercial bank as a guarantor to repaid; in revenue terms, its income tax-free bonds, even if nominal interest rates and bank deposit products over the same period on a regular basis Lump same, there are still over 20% of net income, while corporate bonds, the investment income is to pay 20% of personal income tax, while corporate bonds of face for the country there are also strict restrictions on interest rates, corporate bond interest rate shall not exceed normal bank deposit products over the same period on a regular basis Lump 40% in the period in bonds, convertible bonds and corporate bonds are generally medium-term investment products, book-entry ordinary bonds and corporate bonds is generally long-term investment products taking into account the existence of the secondary market, if investors have the ability to focus on market volatility, the book-entry treasury bonds and corporate convertible bond is a better choice, if you can not afford, the bonds is the best choice.


Company Convertible Bonds: long-term stable investment choice is not based on <<Interim Measures on Management of convertible bonds,>> and <<Law>> requirements: The company's convertible bond issuers can be listed and state-owned key enterprises, currently the main listed companies. For this analysis, the author lists some of the 2004 convertible bond issue (see Table 2.

Convertible bonds are corporate bonds from the "true colors" as far as varieties from the sale of the form, it is the full realization of an online subscription, investors need not the same as other bonds to the "tangible" consignment buying agency.

From the ease of purchase point of view, is the most difficult one is the amount of small listed companies to issue convertible bonds of the overall scale is generally more than ten million to several billion dollars, but first to the original placement shareholders, and generally go through two subscription, the original shareholders, including non-tradable shareholders and tradable shareholders, the placing and subscription ratio is a high priority, and the remaining amount should be divided into to institutional investors and the public investors, public investors generally do not get the ratio above 50% of Hunan Valin Corporation issued convertible bonds, for example, estimated that the share of public investors can buy only about 5% of the total degree On the other hand if the number of public investors purchase more than the total amount left to their degrees, but also to "draw 摇号", only the lucky investors will ultimately buy convertible bonds.

From the profitability point of view, convertible bonds usually increase every year fixed-rate, the interest rate is not high, which is the nature of convertible bonds, convertible bonds with a fact, "options" in nature, at least six bonds months later, investors are entitled in accordance with the agreed conversion price of convertible bonds into shares of listed companies, turn right and do not turn belongs to investors, investors may gain access to the excess stock returns at the same time after also a price to pay, this price is reflected in the face of interest rates. Based on the above analysis, if investors want to invest in a bond is the main species, in order to obtain a more stable income, then the company's convertible bonds is not a good choice.


The Company's common bond: Select income steady, ordinary varieties of the secondary market bond issuers can Co., Ltd., wholly state-owned companies and more than two other state-owned enterprises or two or more state-owned investment entities set up by the limited investment liability company common bond is generally a long-term investment, most of 10 years (see Table 3 Links to free download http://www.hi138.com
From the issuers point of view, mostly in infrastructure and energy companies based, and these companies also have significant monopoly and government background, it implies the government's credibility in a certain extent, ordinary bonds and bonds, are the channels of financing the government because of one's stronger on the other hand do have bank guarantees, bonds, security is very high.

The proceeds from the bond point of view, the 10-year interest rate of 5% after-tax earnings of around 4% due to the same period Lump bank products for up to five years, therefore, can not simply judge the level of return how. From July 2005 until 5-year bonds issued in terms of its coupon rate is 3.81%, the longer the maturity, earnings will be increased, while 10-year corporate bonds at 4 percent annual yield if this period "compensation" is only 0.2%, its appeal is limited.

From the actual sales situation, the company primarily by ordinary debt securities companies to sales agents, and securities firms to customers and more investors to invest in the stock market in the context of a bad market environment, relatively deserted the stock market trading, investors withdraw funds from the stock market need to find a way out, this time more stable income, have the secondary market corporate bonds would be a good choice, while the size of the Company's common bonds of billions of debt less than the more frequently, so, securities company's internal customers in a very short time they will "digest is completed," the situation to occur. However, if some attention and more attention, we still have the opportunity to buy the Company's common bond.

The future of the Company's common to short-term bonds have floating interest rates and the development of the phenomenon, after all, the macroeconomic environment in the case of uncertainty, investors tend to do short-term investments.

Bond type of investment product is a "big family", the difference between the various bonds is not small, investors can invest according to their ability and effort to choose. Bonds of the nature of the concept of "buy and hold" investment strategy. chose the bond, is trying to avoid or ignore out of financial market volatility, preferring to give up the opportunity to obtain higher returns, only to achieve "peace of mind" can be said is a "lazy" type of investment way.

But in the current financial market outlook remains uncertain, there are many uncertain factors, so the following two suggestions to remind investors: First, bond investment in the current market environment, the relatively high volatility of investment products, have better investment value, the second is to choose the bonds, they can choose good or short-term liquidity of the bond varieties, although the bonds in the bond strengths are still evident in the product, but when the bonds become "scarce resources" conditions, the vision put some open, you can choose to invest in corporate bonds varieties. Links to free download http://www.hi138.com