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FINANCE

Convertible Bond Market in Frenzy

As convertible bonds avoided the kinds of restrictions that have been placed on other forms of refinancing, issuers looking to cash in have flocked to the rapidly growing asset class. Photo: Visual China
As convertible bonds avoided the kinds of restrictions that have been placed on other forms of refinancing, issuers looking to cash in have flocked to the rapidly growing asset class. Photo: Visual China

In China, the convertible bond market is in a feeding frenzy.

From the perspective of investors: During the past month or so, convertible bond-trading accounts more than doubled to 5.9 million. The chance of getting an allocation could be as low as 0.0013%, slimmer than in most initial public offerings.

From the perspective issuers: As of Nov. 7, 120 companies have announced plans to issue convertible bonds, involving 290 billion yuan ($43.6 million), according to data from Industrial Securities. Seventy of these companies announced their plans after new rules on share dumping were issued in May.

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