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Thinking on the Innovation of China's bond market

Author: HuangShaoJin From: www.yourpaper.net Posted: 2009-04-01 10:36:36 Read:
one of China's bond market innovative limiting factor
(A) control of the bond issue is still more
The primary factor affecting innovation in corporate bonds issuance system. Corporate bonds in conjunction with the People's Bank of China by the National Development and Reform Commission, Ministry of Finance, the SFC and other departments to prepare the country of issue size for the year, after the approval by the State Council issued the relevant departments for approval issue, basically not out of the stereotype of the planned economy. And after the issuance of corporate bonds, needed to be approved by the SFC and the Stock Exchange approved before listing, complex procedures and strict conditions so that corporate bonds can be listed in the Stock Exchange of the few, and daily trading volume is minimal. Most of the rest of corporate bonds is not only inconsistent with the Exchange's listing requirements, the OTC is severely restricted.
(B) the the bond issuance main innovation of insufficient demand
In China, 60% of the listed companies in the issuance of corporate bonds of state-owned enterprises, and through bond financing and can be traded almost entirely state-owned enterprise nature. State-owned enterprises in the agent first choice is how to melt into the funds, consider suitability of the enterprise's development plan as well as risk aversion few of financing, this principal-agent problem is lack of motivation led to the corporate bond market factors a.
(3) bond trading body dynamics of innovation is not enough
Since the the existing intermediaries main focus for looking for the appropriate bond issuance main, plus processing time and the risk of innovative products led to the opportunity cost is too high, that attend to the research and development of innovative products. Even in a market innovation more inter-bank bond market, the majority of trading members due to the lack of preparation in terms of knowledge and technology, market research capacity is not strong, and ultimately it is difficult to develop appropriate products combined with market demand.
(D) The bond proceeds inflexible pricing
"Corporate Bond Management Regulations" provisions of the corporate bond rate should not be higher than the same period in the bank savings rate of 40%, in the case of low bank savings rate, established in accordance with the provisions of the corporate bond interest rates and the effective interest rate of the current capital market phase larger than the gap between the lower income investors. , And adhered to the provisions of the issuers, bond interest rate cap, ignore the credit rating of the issuer, no risk premium for corporate bonds interest rates, caused by the high cost of high-quality corporate bond issuance for general corporate lack of interest rate risk mechanisms and price elasticity, not The real objective risk differences reflect the different enterprises, to some extent affected the main body of investment income.
(E) The members of the bond market single structure
China's bond market, especially the inter-bank bond market, investors are mostly commercial banks, more than 80% of the investment and trading between commercial banks, due to the variation of the source of funds of commercial banks was convergence, funds use a single channel, operating similar style, performance in the investment behavior of convergence. Interbank funds loose rush to buy bonds, strapped for cash he dumped the bonds, the market often in a non-equilibrium state, often forming unilateral market. According to statistics, in 2002, when bond prices fell, 9 ˫߱ is basically bought bonds suffered losses.
(F) bond market hedging instruments is insufficient
In the case of lack of appropriate financial derivative products, there is no "short" mechanism, making the bond market not only fried up fried or lack of hedging instruments in the market fell. Rising channel with China from a long-term interest rates downward spiral slowly into the interest rate, the bond market prices, the problem of a lack of hedging instruments exposed. China's bond market is only a tool for hedging, floating rate bonds, option bonds and bond forward transactions. Floating rate bonds issued less erratic, it is difficult as a flexible tool use and floating benchmark 1-year deposit interest rate hedging is difficult to play in the case of fluctuations in market interest rates, but deposit rates unchanged. The investment option bonds only conversion function is to provide a limited period of time, hedging function is extremely limited; launch of the bond forward transactions still needs time to play a role.
Bond market innovative thinking
(A) the system of innovation: the premise of bond market development
The bond market, financial innovation important prerequisite is to have an external environment conducive to innovation and to encourage and protect innovation system, through the establishment of a set of institutionalized rules and procedures, innovative financial instruments in accordance with the market demand for a reasonable and natural produce. Currently, the innovation and development of the domestic bond market mainly rely on management to promote sound and norms. With the development of the market, market participants are becoming more rational, more to let market forces play a dominant influence in the process of financial innovation, to create a relaxed and good institutional environment for the bond market innovation.
Distribution system innovation. The issue of institutional innovation is the key to solve the corporate bond market is smaller, the problem of poor circulation. The issue of institutional market-oriented reform should gradually try to decide, based on macroeconomic indicators and changes in the size, type and structure of corporate bond issuance. From the case since 2000, the National Development and Reform Commission organized batches of corporate bonds submitted to the State Council, a total of nearly 200 billion yuan of corporate bonds amount approval. These bonds is mostly smooth issuance is completed, some of the bonds have maturity payment does not appear the issuance, payment, or other aspects of the problem. Overall, the corporate bond market in China has entered a period of normal development, and gradually accelerate the pace of development. Visible, already has canceled the special approval system objective environment. If special approval system was abolished, the corporate bond amount approved by the transition from the current batch system to normal, the continuity of the examination and approval system, or the approval system, breaking the batch mode amount centralized approval, to take "reported a trial one by one issue one way. This will allow debt issuance enterprise financing plan more operational and easier to grasp market timing, market supply of corporate bonds is also more continuity, of great practical significance to the development of the corporate bond market.
2 trading system innovation. Transaction costs is to determine the size of the key factors of market liquidity. Trading system innovation: First, cost-efficient fund settlement system. This includes significant amounts of real-time payment system, DVP and net settlement system, agents settlement system and margin trading mechanism. Overall, domestic technically has basically introduced above liquidation means, but the overall system is not perfect, mainly including the central bank did not establish payment system during the day and overnight overdraft system, the proxy settlement bank risk aversion also did not establish the date of rooms and overnight overdraft system, the net settlement system has not yet introduced in the inter-bank market and the over-the-counter market and so on. Second, the market maker system of multi-level and the broker system. Maker system is running one of the pillars of the OTC market. Should be given to market makers in the formation of the the authoritative market price appropriate monopoly market-making, improve income risk than the market-making behavior. On this basis, the market maker system, a multi-level encourage conduct proper and orderly competition between the market maker. At the same time, the establishment of the broker system, to make up for the lack of market makers in the number and in the lack of market-making varieties. Third, the information disclosure system is sound. Should be a reference to the practice of companies listed by the enterprises to develop and improve the information disclosure system by dedicated senior management commitment to information disclosure. Through the formation of a standardized disclosure of information channels, maximize assurance investors timely, accurate access to relevant information and avoid risks. The contents include: the issue of the disclosure of information and continuous disclosure; confidential setting prior to the public disclosure of the information; increase the information disclosure of significant events. 3 credit rating system innovations. The credit rating system is the basis for the development of the corporate bond market, interest rate, term and repayment methods directly affect corporate credit rating to the bonds and whether they can / are Lee issue, maturity timely payment on a series of questions, directly determine the enterprise the financing costs of the bond and the issue of success or failure. Establish authority and transparent credit rating system, rating agencies to solve the problem of inadequate competition and the integrity of the poor, in a certain period of time provisions mandatory continuous rating, the rating agencies to implement the necessary qualifications for the person, require rating costs the bottom line at the same time strict the inspectors and mandatory assessment of the code of conduct of these rating agencies and rating accuracy. Proposed earlier internal gradually introduced on the basis of an open foreign rating agencies and the implementation of the survival of the fittest; disclosure and professional audits to strengthen the operations of the financial information on debt issuance and investment institutions, strengthen the accuracy, timeliness and detailed to ensure that information transparency. Credit information database is currently being established at a reasonable price paid foreign fair and open social research institutions and investment groups to play a supervisory role; repeal mandatory guarantee, chosen by the market itself; increase of issuer default the legal and administrative penalties, the cost of default to a sufficient degree of deterrence.
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