Financials Jan 24, 2022 06:49 AM (GMT+8) · EqualOcean
The data show that the overvalued phenomenon in the convertible bond market has become more and more obvious. Not only the absolute average price has approached 150 yuan, but also the conversion premium rate, the core index to measure the valuation, has rushed to a high of 35%. This means that the overall valuation of convertible bonds is 35% higher than that of positive shares. This is a rare high valuation phenomenon in the history of the convertible bond market. Yu Miao, the fund manager of Xingquan convertible bond fund, the first Convertible Bond Fund in China, said that the current overvalued value of convertible bonds reflects the imbalance between supply and demand to a certain extent and the high expectations of the market for the equity market. This also reflects that the fixed income market is facing the challenge of "asset shortage". It is noteworthy that the overvalued value is reducing the cost performance of convertible bonds, which also brings the vulnerability of the market.