To curb speculative speculation on convertible bonds, the price limit is better than the intraday suspension

  Financial observation

  In addition to restraining market speculation, adopting price limits can also allow investors to conduct normal transactions.

  In response to the recent speculative behavior in the convertible bond market, supervision has once again shined.

On October 30, the Shenzhen Stock Exchange issued the "Notice on Improving the Intraday Temporary Suspension System of Convertible Corporate Bonds" to optimize the intraday temporary suspension system for convertible bonds and increase or decrease the intraday transaction price for the first time from the previous closing price. Or when it exceeds 30%, the suspension time will be changed from the original temporary suspension of 30 minutes to 14:57.

  The Shenzhen Stock Exchange's amendment to the temporary suspension of trading of convertible bonds has a positive effect on curbing speculation in the convertible bond market.

In fact, the Shenzhen Stock Exchange's amendment to the temporary suspension system of convertible bonds is basically consistent with the Shanghai stock market.

This is actually very necessary.

Although there are two exchanges, investors are still the same group. Therefore, it is more convenient for investors to maintain a unified trading system and rules.

From the perspective of convertible bond transactions in the Shanghai stock market, it is obviously much more rational than the speculation of convertible bonds in the Shenzhen stock market.

Therefore, the temporary suspension of trading of convertible bonds to 14:57 when the intraday increase of convertible bonds reaches 30% is conducive to curbing the speculation of convertible bonds.

  However, although perfecting the system of temporary suspension of trading of convertible bonds can also curb speculative speculation of convertible bonds to a certain extent, the system obviously has certain drawbacks.

For example, the first temporary suspension of trading is basically useless, and it cannot really serve as a reminder of risks or the effect of making investors "calm down."

According to current regulations: if the intraday transaction price rises or falls by 20% or more than the previous closing price for the first time, the temporary suspension period is 30 minutes.

This time the suspension is considered to be "form".

  Another example is the suspension of trading at a 30% increase and decrease until 14:57. Although this restrained speculation in the market, it also restricted investors' transactions and greatly reduced the trading efficiency of related convertible bonds.

If the market rushes to 30% soon after the market opens, or the market opens directly above 30%, this means that most of the day's time is wasted.

Therefore, a long suspension of trading is not conducive to improving transaction efficiency.

  For another example, because trading has been suspended until the end of trading is resumed at 14:57 after the increase or decrease reaches 30%, the risk of this end of trading is obviously magnified.

Although it is stipulated that “investors can declare or revoke the declaration during the temporary suspension of trading in the market. When trading is resumed, a resumption call auction will be implemented for the declarations that have been accepted,” but the declaration during the suspension is no different from a blind person.

Moreover, a large number of declarations are concentrated in the last three minutes of trading, which may not only cause severe price fluctuations, but also investors face the risk that the declaration cannot be traded, and then investors will face overnight risks.

The overnight risk should not be underestimated for a speculative variety.

  It is for these reasons that I suggest that it is better to replace the temporary trading suspension system with a price limit (that is, a price limit system).

First of all, you can choose a 20% increase or decrease in the setting of the increase and decrease, which is consistent with the A-share market’s sci-tech innovation board and the ChiNext. From the development trend, the next step will be the increase and decrease of the entire A-share market. Set to 20%.

In this way, the rise and fall of the domestic capital market are set to 20%, which can facilitate investors' investment to a large extent, and is also conducive to the relative fairness between markets.

  Secondly, the adoption of price limits can not only curb market speculation, but also allow investors to conduct normal transactions.

Trading was temporarily suspended during the trading session.

But the price limit is different. For example, if it rises by 20%, although the board is closed, it does not affect investors' sales.

Although investors cannot buy, this is precisely the need to curb market speculation, so that investors who are unwilling to participate in market speculation can withdraw from the market at any time.

And this kind of price limit also avoids the risk of uncertainty in late trading.

  □Pi Haizhou (financial commentator)