Study On Developing China's Convertible Bond

The convertible bond is a kind of company bond that has transferring-share option by the way, and a kind of mixing financial derivative tool. It not only contains the characteristic of the ordinary bond but also contains the characteristic of company's stock. As a kind of the middle investment and financing tool, the prosperity and development of convertible bond market system is very favorable for the maturity of capital market and the dissolving of financial risks of our country. With China's formal entry of WTO and the further opening of capital market, what becomes a subject that should be urgently studied is how to use abroad successful experience of convertible bond market development as reference to structure convertible bond market system of our country. This paper starts with the concept, type, characteristic and domestic and international development course of the convertible bond, and analyses the clause of the convertible bond of our country. After comparative study on the convertible bond and other financing tools, it analyses the value of convertible bond, afterwards, using the model of option pricing of convertible bond to analyse the cases. On the basis of this, it probes into the systematic general plan of structuring and perfecting the market system of convertible bond of our country. It is undoubted that this paper has important theoretic and realistic meaning for the development of convertible bond market and the perfection of capital market in our country. This paper includes four chapters altogether. The first chapter describes the concept, type, characteristic and domestic and international development course of the convertible bond. The second chapter analyses the clause of the convertible bond of our country. Combined the concrete conditions in 2003 of our country, it analyses the characteristic of stock and debt that included in the clause of the convertible bond, on the basis of analysing question existing on the design of convertible terms of bonds of our country, it puts forward the corresponding suggestion for designing clause. After comparative study on convertible bond and other financial tools, the third chapter probes into the profound reason that the convertible bond market prevailed in 2003 in our country. The forth chapter analyses the value of the convertible bond. It analyses convertible value form, ordinary value of convertible bond, part of option value of convertible bond, and then analyses systematically investment tactics on the convertible bond. After describing B-S option pricing model of the convertible bond, the fifth chapter, using B-S model for pricing analysis of convertible bond representativeness in 2003, and then analyses the limitation of B-S pricing method. The sixth chapter probes into the construction and perfection of the market system of convertible bond in our country. After analysing the hot question and the question existing presently of the convertible bond market in our country, it puts forward the systematic general plan for structuring and perfecting the market system of convertible bond in our country.