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Current certificate bonds issuance and management problems and countermeasures

Author: XieLiangMing From: www.yourpaper.net Posted: 2007-11-20 01:14:09 Read:
[Abstract] the certificate bonds as one of the two main varieties of the National Debt, the mobilization of financial resources, promote economic development, to meet the investment needs of the people play an important role. But after 10 years of reform and practice, some of the problems in the actual issuance and management process gradually exposed. To this end, I propose four improved and perfected the certificate bonds issuance and management countermeasures.



[Key words] the bonds trading market risk underwriting term structure of interest rates



The certificate bonds is based on the Ministry of Finance is the main issue, the national credit guarantee for urban and rural residents and savings class bonds issued by the various types of investors, and has been issued since 1994, has lasted 10 years, to raise financial capital promote economic development, to meet the people's demand for investment played an important role, but the actual issuance and management process gradually exposed, in urgent need of improvement and perfection.

First, the bonds interest rate design is not reasonable enough

Certificate treasury bonds issued on interest rates to some extent reflect the situation of demand and supply of funds in the capital market, the main issue of interest rates of the bonds is a reference to the same period the bank deposit rate to determine. Interest rate adjustments to alleviate investors buy bonds difficult to play a role in promoting However, due to the certificate bonds relative to the investment advantages of savings deposits have not the majority of investors agree that, in addition to many other financial assets in addition to savings interest rates are much higher than the certificate treasury bonds issued by the interest rate, and therefore the risk of the bonds is small, realizable also more flexible, but the level of interest rates is still the most important factor to affect the issue of certificate treasury bonds. The interest rates of the bonds at maturity debt service, without taking into account compound interest, overdue nor plus interest provisions also affect the enthusiasm of investors subscribe, is not conducive to the bonds issued on schedule.

Certificate bonds term structure disadvantages

Long time, of our certificate bonds only 2-year, 3-year and 5-year three species, has not been issued one year following short-term and long-term more than 10 years the bonds are medium-term bonds and short-term treasury bonds issued significantly faster than the long-term government bonds. This term structure, there are many drawbacks: (1) It is difficult to meet the diverse needs of investors; (2) is likely to cause the bond repayment period is too concentrated, a debt repayment peak, to exacerbate fiscal balance pressure, the objective impact on the effective use of treasury funds ; (3) so that the central bank can not select a variety of government bonds of different maturities open market operations affect the implementation of monetary policy effects, but also increased the difficulty of the supervision of the financial sector.

The certificate bonds investments main
too concentrated

Actual objects of subscription of the bonds are mainly urban residents. A survey shows that the majority of the bonds should debt main working-class, and the subscription object is mainly concentrated in cities, accounting for more than 90% of the total investigation. The subscription object age structure, mainly in people over the age of 40. The reasons: First, underwriting agencies, advocacy and service work there is a deviation. Many underwriting agency carrying out the bonds issued publicity emphasis on urban personal neglected rural areas and institutions, and even of some issuers unclear units ability to purchase certificate bonds. Of bonds, payment procedures, circulation issue of bank deposits incremental impact, to some extent reduce underwriting willingness of the bank employees. Agent issuers set unreasonable. The last few years the vast majority of commercial banks in the county the following areas basically no set point of the bonds available for sale, rural credit cooperatives do not have the underwriting qualifications. Fourth, the transparency of the sales of the bonds is not part of the underwriting syndicate members there are "reluctant sellers" behavior. Certificate bonds have higher interest rates and income (exempt from interest income tax), and the maturity schedule convertible, driven by profit, resulting in the bonds of the first issue and secondary offering after the advance payment a mere formality, not truly meet the needs of the general public purchase.

Fourth, the liquidity of the bonds to be improved

The certificate bonds secret government bonds shall not be renamed, can not be listed for sale. 1999 the People's Bank of China and the Ministry of Finance issued the "Notice" provisions on the issuance of the "Pledged Loan Measures, the bonds issued in the year 1999 and beyond can apply for secured loans business, but Pledged Loan starting point there is a certain limit (currently $ 5,000), 90% of the loan amount shall not exceed the collateral denomination. Certificate bonds can be redeemed in advance, but only a one-time full redeemed, and can only be handled in the original purchase outlets bondholders personal in different places, the certificate bonds simply can not be honored.

Fifth, the underwriting of the bonds means more backward

The vast majority of the bonds underwriting outlets still follow the manual, the issuance of treasury bonds and payment efficiency is not high national debt receivables the certificate forgery performance also poor, that is, in the large and medium-sized cities underwriting agency also unrealized city counterparts through buy Tongdui, and rarely opened a telephone banking, self-service banking, Internet banking and other non-counter purchase channels. The regulatory authorities can not be real-time dynamic monitoring of the jurisdiction of bonds, payment process, leading to the risk of certificate treasury bonds in the underwriting process are very hard, also threatened the legitimate rights and interests of creditors.

For the issue and management of these bonds in the existence of the problem, I propose the following measures:

, Optimize the maturity structure, to develop reasonable the bonds maturity and interest rate

Period and the interest rate of the bonds is linked to each other, a reasonable period of time and the interest rates on treasury bonds play a leading role. On the issue of interest rates designed not only want the same period bank savings rate as the first parameter, but also combined capital supply and demand relationship, the market price situation, the level of economic development and investor preferences and other factors, to determine a reasonable level of interest rates, and strive to Find the best points of the funding by financing costs and the size of the investor's profit. Specifically: the economic boom should be an appropriate increase in the level of interest rates should be appropriate to reduce the level of interest rates during a recession. Government bonds issued in the same year should be different, and adequate funds in the first quarter, the national debt in short supply, the issue of interest rates may be slightly lower; relatively tight supply of third and fourth quarters of social capital, the the bank busy completing the full year task, on the national debt existence of "reluctant sellers" psychological, the issue of the interest rate may be slightly increased. Interest payment on maturity debt service (without taking into account compound interest), can also be a year-on-year interest-bearing or discounted issue, but in order not to lag behind the regular savings banks, interest-bearing deposits, I propose to abolish the certificate treasury bonds overdue plus interest practice that allows the reference to the Credit Management Ordinance overdue interest-bearing provisions, the current deposit interest rate quoted on the press day of withdrawal accrue interest, in order to activate the enthusiasm of investors subscribe.

Should focus on the design of the repayment period, the debt service in the annual evenly distributed, so long, medium and short-term government bonds to maintain a reasonable proportion. Recommend great efforts to develop long-term government bonds, an appropriate increase in short-term government bonds, to the maximum extent possible to meet the needs of investors. For example, an additional 1-year, 2-year short-term and eight years, the 10-year long-term grade, and even you can try to keep the national debt is higher than the bank longest period (5 years) on the basis of after-tax income constant proportion of regular savings deposits issue 15 years, the 20-year period of the bonds, and each term kind of certificate treasury bonds issuance to maintain the proper proportion.
Second, broaden Offer range, improve the quality of service of the underwriters of the bonds

Certificate bonds underwriting 40 financial institutions, Offering range focus on large and medium-sized cities. While China is a large agricultural country, farmers limited by geographical information conditions, relative to a single investment channels. Recommended increase propaganda of rural areas, especially in remote areas, empowerment of rural credit cooperatives to participate in the qualification of the bond underwriting syndicate, extending the certificated bonds issued outlets to the township, so that the majority of the rural masses to buy. In addition, should be appropriate to encourage qualified enterprises and the use of funds for the purchase of spare.
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