1. Debt is weak.

There are two main possibilities, one is to increase the market risk-free interest rate, and the other is to reduce the credit of convertible bonds.

This time it was obviously the latter, and many investors began to think pessimistically that some convertible bonds would eventually default.

I can't say it makes no sense at all. From the previous default of corporate credit bonds to the suspected default of some major shareholders of convertible bonds, the current situation of credit tightening is fully exposed. The current financial policy makes it difficult for some enterprises to borrow new debts to repay old debts, and this pessimism is finally transmitted to convertible bonds.

The credit environment is tense and the lack of money leads to the weakness of convertible bonds.

2. Positive stocks fell.

This year's stock market is almost entirely an institutional market, and it is also a good track market. As long as institutions feel good about stocks, they will rise to the sky, which is the so-called structural bull market.

Structural bull market is another way of saying it: structural bear market. Because in 2020, although the major indexes rose a lot, nearly half of the stocks actually fell.

This structural market finally reached its climax in 65438+February, because the market funds were not enough, so there was a very obvious seesaw market. Except for consumption (liquor), new energy vehicles and photovoltaics, almost all other industries fell.

Convertible bonds are bonds that bondholders can convert into common shares of the company at an agreed price at the time of issuance. If the bondholders do not want to convert shares, they can continue to hold the bonds until the repayment period expires to collect the principal and interest, or they can be sold and realized in the circulation market.

If the holder is optimistic about the appreciation potential of the issuing company's shares, he may exercise the right to convert the bonds into shares at a predetermined conversion price after the grace period, and the issuing company shall not refuse. The interest rate of this bond is generally lower than that of ordinary companies, and the issuance of convertible bonds by enterprises can reduce the financing cost. The holder of convertible bonds also has the right to sell the bonds back to the issuer under certain conditions, and the issuer also has the right to redeem the bonds under certain conditions.