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On the existing problems in China's corporate debt market and countermeasures

Author: WangHongBo From: www.yourpaper.net Posted: 2009-06-30 12:53:29 Read:
Abstract: In our country, for a long time, as the securities market part stocks, government bonds, and fund market very people's minds. The same is the stock market an integral part of corporate bonds has is theoretically Shaorenwenjin the practice stagnating. China's corporate bond market, there are many problems, appropriate countermeasures must change the current status quo of bonds in order to facilitate long-term sustainable development of China's securities market.
Keywords: corporate bonds; secondary market; bond credit rating
The concept of corporate bonds
The concept of corporate bonds
Corporate bonds enterprises to raise capital, issued in accordance with legal procedures, agreed to the debt service of the bonds within a certain period. Corporate bonds on behalf of a creditor-debtor relationship issue bonds between companies and investors, bondholders, creditors of the enterprise, not the owner of the right to participate in or interfere with the management of the business. Corporate bonds and stocks, belong to the same securities that can be freely transferable.
In a foreign country, because of its issuers confined Co., Ltd., both corporate bonds and securities of the Company name can be used in the same sense, both said that sometimes can be mixed, but it should be called the international name for the securities of the Company. In China, the concept of corporate bonds, a wide range. Corporate Bond Management coherent provides corporate the debt issuance enterprise refers to a legal personality types of nature, including the joint-stock company, in response to this, the Company's securities in our country, also known as corporate bonds.
Basic elements of corporate bonds
Corporate bonds is a means of financing and investment tools. Its basic elements as the embodiment of credit and debt certificates, mainly by the following
First, the issuers. In China, the main issue of corporate bonds is the legal entity in our country. Corporate bonds issued in accordance with statutory procedures, the right to the use of funds for a certain period of time and the benefits and bear the risks and obligations of the borrowing shall be scheduled debt. In addition to the approved enterprises, any unit or individual is allowed to issue corporate bonds.
Investment that bondholders. Their right to press
The provisions made interest and principal due in the right, but not involved in the operation and management of enterprises, and is not responsible for the business situation of enterprises.
The third is the interest rate. Corporate bond rates is directly related to the interests of the number of issuer enterprise financing, financing costs and investor bonds. The interest rates of corporate bonds by investors on the acceptance of the yield, the capacity of enterprises to issue bonds and reputation in the community, the trend of the market interest rate and the length of the term of the bonds, and other factors.
Fourth period. Play during the period ending on the date of the repayment of principal and interest for the duration of the bonds from the issue date. Enterprises are usually based on the period of the capital requirements, future market movements in interest rates, the level of development of the circulation market, other bonds in the bond market maturities, investor preferences, etc. to determine the term structure of bonds issued.
II Brief Analysis of the current problems of the corporate bond market in China
From the point of view of corporate bonds 10 years of development history, the corporate bond market in China for the economic construction of the country to raise a lot of money, made a positive contribution to promote the reform of state-owned enterprises, reform of the financial system and the reform of the investment and financing system for the cultivation of the capital markets. However, compared with the current development of the world's capital markets (issuance of bonds is the main funding channels for Western companies, account for a smaller part of the financing of shares marked), compared with China's stocks, the bond market, the corporate bond market in China is lagging behind, regardless of there is a big gap between the issue size or degree of maturity in the secondary market on the status and role of the corporate bonds in the entire stock market has not been fully exploited. Compared with other financial products, the development of the corporate bond market is really difficult. Why to answer this question must be on an economic analysis of the relationship between supply and demand and market conditions for corporate bonds in China.
(A) the issuance of corporate bonds demand constraints
A strategy to mislead the securities market, the end of the corporate bond market is included in the securities market's overall development plan
China's corporate bond market is less developed deep-rooted institutional roots, is a government-driven development of the securities market mode misleading. Government-driven model led to the development of China's securities market target binary 'is necessary to undertake the task to optimize the allocation of funds, but also shoulder joint-stock reform of enterprises, promoting the mission of economic reform, the only market in the form to get the government to meet the requirements of both support and encouragement. When the the binary object conflict difficult endowment, the actual operation is often sacrificing the efficiency of the allocation of funds to ensure the smooth progress of economic reform. This strategy mode makes the corporate bond market has become the Government to develop the most neglected part of the securities market practice. China's corporate bond market development has been constrained Another important reason is that there are many defects in the enterprise itself, mainly in the irrational enterprise property right system, the capital structure is irrational, their own lack of credibility.
Lack of corporate bond pricing RMB benchmark interest rate
The benchmark interest rate is the universal reference value recognized in the capital market interest rate, is to form the basis of the market prices of other financial products. In other words, to achieve market and liberalization of interest rates, market participants generally recognized benchmark interest rates in the financial markets, the prices of other financial products based on the level of interest rates to develop. From the view of the general laws of the international financial markets, are eligible to become this rate only reasonable structure, high credibility, good liquidity of the interest rates of financial products, while most have this feature on the market interest rate government bonds yield. Because the main issue of the national debt is a national high credibility, the lowest risk of investment in government bonds. A large national debt, liquidity, liquidity. Fixed time of the issuance of treasury bonds, the varieties of the term structure is reasonable, market participants can always get to the more than 10-year bond yields from a three-month period. It is because bond yields have these characteristics, financial market participants generally with this interest rate as a benchmark of the market interest rate. In the past for a long period of time, due to China's government bond market is underdeveloped, the entire financial market does not have a benchmark interest rate. Give the pricing of corporate bonds in the objective difficulties, the corporate bond interest rate determined in this case is difficult to attract investors.
3. Lack of scientific corporate bond pricing system
The accepted benchmark interest rate due to lack of market pricing corporate bonds, can only take administrative methods to determine. If the relevant government departments provides enterprise-coupon bonds can not be higher than 40% of the bank deposits of the same period. Practice has proved that this pricing method is extremely unreasonable, because this pricing method does not consider the value of the credit. According to this provision, whether good or bad corporate reputation, the strength of the ability to pay, and the size of the investors to take risks, as long as the issuance of bonds for the same period, the price of the bond varieties objectively give corporate bond price signals caused confusion. And, in fact, many of China issued corporate bonds interest rate than the same period in bond yields lower, which limits the enthusiasm of investors to buy corporate bonds.
(B) corporate bond investment demand constraints
A secondary market is immature, poor liquidity of corporate bonds
Although the development of China's corporate bond market, a market is slow, but after all, in advance. Secondary market of corporate bonds is almost at a standstill, manifested in the listed species and small in scale, the trading volume. A direct consequence of the slow development of the secondary market of corporate bonds and poor liquidity of the corporate bond investors when they need the funds in the hands of the bonds but can not sell corporate bonds equal to the fixed deposits in banks, even worse than the time deposits (time deposits can be paid in advance corporate bonds can not), the superiority of the bonds can not be reflected, affect investor confidence. The secondary market for corporate bonds lag will inevitably turn affect a market issue, thereby constraining the overall development of the corporate bond market.
Varieties of corporate bonds, the duration of a single, a lack of financial innovation since 1988, China issued corporate bonds, corporate bond issuance varieties is essentially a mode 'key construction bonds or the central corporate bonds or local corporate bonds a period of 2-3 years. maturity debt service, uniform interest rate, consistent system for years, the lack of flexibility and financial innovation is not attractive to investors, even if investors its exposure to credit risk and interest rate risk, corporate The bond market can only be lifeless, desolate.
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