Shenzhen Stock Exchange (SZSE) and Shenzhen Securities Information Co., Ltd. recently announced to launch SZSE Convertible Bond Index (Code: 399307, Abbreviation: SZSE Convertible Bond) and CNI Convertible Bond Index (Code: 399413, Abbreviation: CNI Convertible Bond) on August 27, 2014. The indices are designed to depict the overall operation feature of the convertible bond market, and fuel the development and innovation of indexing investment.
Being as a hybrid security with debt- and equity-like features, a convertible bond holder may enjoy a return close to stock investment in a bull market and resist the crash when market collapses. Holding of a convertible bond not only keeps the long-term growth potential of stocks but also the security and income advantage of bonds, is a kind of investment which maximizes profit when risks are considered. In recent years, the convertible bond market witnesses steady growth with 31 convertible bonds listed on Shanghai and Shenzhen stock markets and valued about CNY 167 billion (as of the end of July, 2014). The convertible bond market has become an important component in the exchanges’ bond market.
SZSE Convertible Bond Index and CNI Convertible Bond Index take December 31, 2011 as the base date and 100 points as the base value. Exchange-listed convertible corporate bonds with book value balance no less than CNY 30 million compose the indices’ sample space, which is subject to monthly adjustment.
According to statistics since the base date till the end of July 2014, SZSE Convertible Bond Index and CNI Convertible Bond Index have achieved accumulative return rate of 37.13% and 10.06% respectively, in comparison to 0.19% of SZSE 100 Index and -4.25% of CSI 300 Index during the corresponding period.
More specific material on SZSE Convertible Bond Index and CNI Convertible Bond Index can be found on the website of Shenzhen Stock Exchange (www.szse.cn) and the website of CNI Index (www.cnindex.com.cn).