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Analysis of modern Chinese bond market price changes

Author: BaiLiJian From: www.yourpaper.net Posted: 2007-11-19 14:32:26 Read:
[Summary] modern Chinese bond issue began in 1894, the bond transactions occurred after the founding of the Republic. Along with the changes in China's modern social and economic life, and its bond prices also often large changes. This paper tries through the analysis of historical data for this period, mainly due to reveal the impact of modern China's securities market bond price changes, including the determination of the guarantee fund, bond yields, speculative and other non-economic factors.

[words] speculation in government bonds / bond price changes / guarantee funds / bonds yield /
Public Bond / Bond Price Fluctuation / Date Fund / Bond Rate ofReturn / Speculation

The body]
the price of the bond market in modern China, along with changes in social and economic life, and constantly undergoing dramatic change. This change is epitomized in the securities market. Chinese entrepreneurs in Shanghai Stock Exchange in the national financial center is modern China's largest exchange, and therefore, the Shanghai stock market price movements become the main basis of the study of modern China's bond market price changes. This paper tries through analysis of historical data for this period, mainly due to reveal the impact of modern China's securities market bond price changes.

the basic condition of modern China's bond market changes

modern Chinese bond issue began in 1894, when the Qing Dynasty in order to make up for the emptiness of the treasury began to follow the system of Western public debt issuing bonds . Qing dynasty issued bonds of a total of three items: borrowed provider shall, Akinobu stock and patriotic public debt, estimated that less than 50 million two-Paid silver. These bonds are basically into circulation and, therefore, it does not matter the price change. After the Revolution, the issue of the bonds gradually increased, growing trading requirements, Peking Stock Exchange was established in February 1918. From 1914 to 1927, with Beijing as the center, and the Bank of China and Bank of Communications for the underwriting of the main bond issuance and trading market basically formed. However, with the transfer of the KMT government agencies to Shanghai, Beijing as the center of the securities market began to decline, before and after 1929, with Shanghai as the center of the bond issuance market is basically formed. The bond market trading bonds 98% government bonds, price changes mainly in government bonds. Unknown, because the fate of the Kuomintang government after the outbreak of the Sino-Japanese War in 1937, the issuance and trading of bonds decline. On the other hand, due to the government bonds in the ten years (1921) finishing the case before the introduction of non-continuous data available for research, so this period of 1922-1937, the paper studies changes in bond prices.

we first analyze the price movements of the bond market from 1922 to 1929. The bond market conditions in

1922 added to your account bonds to collate and organize financial bonds the most active of all the bond market showed a decline from January to July, due to the impact of the letter and Exchange Crisis, the securities market is extremely depressed. After July, the Government, through modifications funded by way of tariff balance of the guarantee fund has been the bond market began to gradually rise. Although the middle of the straight Bong war and other reasons, the bond market has dropped slightly, but the overall trend is up, only ninety-six bond guarantee fund unfunded trend down. In In early 1923, the Inspector General of Customs Engelhard associated legends do not want custody of the Fund, the bond market panic due to price falls, Angle clarify the facts, a time when monetary policy easing, the bond market back up and form strong . Since then, due to the financial bonds balloting postponed in April and July of political changes, coupled with the November harvest, monetary policy tightening, financial bonds only make up line prices by drawing lots, the other showed a decline.

into 1924, the bond market generally rose. However, due to monetary tightening, August ninety-six bond funds with no cause bond market crisis, coupled with political instability, floods drought same since the bond market plummeted. Until the end of the war in October, business languished, monetary Hiramatsu, the bond market began to turn for the better.

1925, the bond market the first four month rally heyday, until May, the tea cocoon transactions required funds, the bond market rose slightly slow trend, combined Thirtieth Incident occurred, the Shanghai stock market in 6 mid-strikes by up to 25 days. October, Zhejiang Army arrived in Shanghai Fengtian retreat in November, finishing financial bonds, finishing two bonds have added to your account bonds balloting position of some smooth, the people, the bond market gradually picked up. Overall, the bond market in 1925 in addition to a slight rise and fall in the middle, broadly buoyant.

1926 bond market situation is relatively stable, debt service could be held as scheduled, no major fluctuations in bond prices. Favorable bond yields, buying government bonds as a good form of investment. During this period the prices relatively stable period since the release of the Modern Chinese bonds.

1927 bond market came to a standstill, finishing added to your account bonds in January, prices are still more than $ 80, to August fell to 36 yuan;
seven long-term bond prices Jan. 70 yuan August dropped to 33 yuan, and its low prices in recent years only to see. August councils gradually stable year to collate the interest on the bonds, the market rumors are likely to be paid on time, therefore, at the end of the bond market started to rise.

1928 the bond market is very prosperous. Cigarette Treasury bills, quartermaster bonds, aftercare 8.5% bonds, short-term financial bonds, financial
long-term bonds issued during the year, while the bond market has not been affected because of the increase in new debt. May Jinan Massacre, the bond market once whereabouts, but the annual trend roughly are on the rise. the



1929, despite the current political situation changes in the bond market overall are somewhat down, but no drastic changes. (Note: For the price movements in the bond market during the detailed hole-sensitive editor: "Economic Index Resources Series, China Social Sciences Press, 1998, 468-470 Pages: Yang Yin Pu:" China's financial ' Dawn Bookstore, 1931.)

then analyzes the changes in bond prices in 1930 -1936 years.

bond prices began to rise in September, 1930. With the changes in the political situation, the bond market from April 1931 to February 1932 and continued to decline, the level difference of 45 yuan. May 1932 to January 1933 bond prices fluctuate, but undulating. After January 1933, the bond market began to rise, the level difference between the 45 yuan. Sluggish due to the economic downturn, industry and commerce, profit income than securities speculative bonds of speculation in blazing strong trading, day trading amount of votes often in excess of 30 million yuan. The average monthly turnover in 1931 amounted to 278 million yuan. Shanghai battle to stop the city for several months in 1932 because of the marginal decrease in total transactions. The average monthly turnover in 1933 exceeded 265 million yuan coupon, 1934 the first five months of the average monthly amount of votes was found in more than 324 million yuan, but most of the trading is fictitious, a very low percentage of delivery. In January 1936, accompanied by the deterioration of the economic situation, the reduction of tax revenue, more guarantee fund deficit, the bond market prices. March 1936 and again finishing domestic debt prices were little changed during this period until the end of December, has been in a wandering state. 1937 prices began to rise.

bonds from 1930 to 1937 troops to save money monthly high and low market price plans can also see the trend of the price changes. the

drawings {f70d02
Figure 1 troops to save money bonds monthly high and low market price (Note: The figure is based on 1930 figures, see Economic Statistics Quarterly "
1932 March, 1 volumes, an :1932-1934, 6 figures, seen Yingjie: "Modern Chinese domestic debt observation," Oriental Magazine, Volume 31, No. 14; July 1934 -1936 February figures, see Bank head office management at the Economic Research: "Chinese and foreign business and financial reporting in 1935 1-12 of 1936 a relevant domestic debt, Shanghai price table.) the

government's degree of credit and bond yields The main subject matter is the government bond rate and bond price fluctuations

modern Chinese stock market transactions, with capitalist countries, the company's stock and corporate bonds as the main subject matter of the bond market, the impact of modern Chinese bond market price volatility, one of the main factors is the degree of government credit and bond yields. the characteristics of the Chinese government bonds

1. Modern

Modern Chinese government bonds issued to emulate a product of the West, most designated collateral capitalist countries rarely specified collateral. This is mainly due to the lack of awareness on the bonds, the state's credit is not very reliable, only to provide collateral to ensure prompt payment in order to win the trust of the bond smooth issued. In modern China, the difference between government bonds and treasury bills not just Treasuries slightly shorter term, the monthly installments of principal and interest, and the bonds regularly balloting principal. But longer in the capitalist countries, government bonds and treasury bills varied: public debt deadline, usually at least three or four decades, and the repayment of any period, Treasury bills only temporary borrowings. In addition, modern China's political vagaries of the securities market stability is worse than the capitalist countries, the price changes, bonds often speculative subject matter.
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