There Was A Friendly Applause For The Stock Market Of Debt To Equity Swap.

Debt to equity swap is good for the A share market, and has a positive effect on the long-term development of the stock market, which is conducive to the stock market going slow. In the October 11th market, the debt to equity market was sought after by the market.

AMC concept stock Hyde shares limit, Shanxi investment, Zhejiang East and so on rose, involving the debt to equity long voyage Phoenix, Sinosteel international limit; with deep state assets and other state-owned enterprise reform concept stocks also increased.

It is the speculation that the market is based on the concept of debt to equity shares. It is no wonder that there is an investor wavering, and it is really starting to consider the debt stock as a major advantage of the stock market, and it is possible to believe that the stock market is taking the slow bull.

But is debt to equity swap really good for the stock market? I am afraid it is difficult to justifiably answer this question.

Why should the debt equity swap be implemented? In the final analysis, the real economy is in a predicament, and there are great difficulties in the operation of the business, so that even debts can not be repaid. Debt can only be eliminated through debt to equity swap.

Therefore, as a debt to equity swap enterprise, it is obviously not a good development company.

In particular, as a listed company, it has a huge resource advantage, and the result is that it can not repay the debt normally.

Such enterprises do not need to use their heads to think that they are rotten enterprises.

Although according to the market oriented bank

"Guiding opinions", this time the debt to equity swap will exclude the "black four category" enterprises from the door of the market debt to equity swap, and will turn the "loss of money" into the "zombie enterprise" which has lost the survival and development prospects; the enterprises with malicious debt avoidance behavior; the enterprises with complex debt and debt relationships, and those enterprises that are likely to contribute to the expansion of excess capacity and increase inventory, will be included in the negative list of the four enterprises.

But in the three types of enterprises that encourage debt to equity swap, it is also difficult to distinguish them from rotten enterprises.

For example, why are enterprises that are difficult but still expected to reverse because of the cyclical fluctuations in the industry? How can we judge which enterprises are "likely to reverse"? And how can the growth enterprises that are heavily burdened with excessive financial liabilities expect to be reversed? And how can they be judged as "growth enterprises" and "key enterprises with high liabilities in the forefront of overcapacity industries"? What is the standard of "key enterprises" here? There are too many loopholes for bad companies to get in.

But debt to equity swap is not a life-saving straw for businesses and banks.

Because as a debt to equity swap, its most basic function is to optimize the debt structure of enterprises, and can not improve and improve the management level of enterprises and banks.

And the improvement of management level is the most important factor that determines the development of enterprises and banks.

If the level of operation and management of enterprises and banks can not be improved, then how long will it take after debt to equity swap?

The financial situation will still deteriorate and the non-performing loan ratio of banks will still rise.

Therefore, as an enterprise and a bank, it is obviously not to rely on debt to equity swap to solve the problem, but the key is to raise the management level of enterprises or banks at the same time of debt to equity swap.

Therefore, the positive effect of debt to equity swap on banks and enterprises is only phased.

On the contrary, debt to equity swap is likely to cause harm to the interests of the public investors.

For example, after debt to equity swap, equity interests of listed companies increase, and shareholders' rights and interests will be diluted.

And the debt to equity (common stock) is ultimately paid by the public investor, and is paid by the two tier market.

If enterprises fail to improve after debt to equity swap, this is actually pferring the risk of creditors to investors.

This is for

That is the real bad news.

In this way, how does the debt to equity swap bring the stock market to a bull market?

But the stock market is a magical place.

Allowing the sale of restricted shares is a huge market share in itself, but the split share structure reform has brought the stock market to a big bull market.

Therefore, debt to equity swap can completely turn bad things into good ones, so it is not impossible for the stock market to get out of the slow bull market. The key is that the debt to equity swap must be properly handled.

Two of the key factors are two. To accomplish these two points, at least we can reduce the negative equity of debt to equity swap to the stock market, and even become a major advantage of the stock market.

First of all, the listed company's debt to equity swap is mainly converted to preferred stock.

Preferred stock needs to be converted into common stock. After the performance of the company is improved, at the same time, the duration of the preferred stock is at least 3 years, then the preferred stock will be converted into common stock and the share price will not be lower than the two class market price when the stock is pferred.

At the same time, the proportion of ordinary shares converted from preferred shares is less than 25% of the total annual turnover, which will impact the market to reduce the preference shares to ordinary shares.

Secondly, if the listed company's debt to equity swap is directly converted into common stock, it should give priority to the needs of the original shareholders of the listed company.

If the object of the conversion is determined as the original shareholder, the debt pfer share may be executed according to the provisions of the rights issue, and be subscribed by the original shareholder at a lower price.

The target of the stock pfer is determined as a specific object. The price of the convertible bond is determined as the two level market price when the debt to equity swap program is implemented, and the 5 day average price and the high price of the 20 day average price are determined as the final pfer price.

And to the specific object of debt to equity swap, lock up period of not less than three years.

After the expiration of three years, the annual reduction of shares should not exceed 1/4 of the share of the debt to equity swap.