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Stock Market Callbacks

April 18, 2018 01:48
source: Beijing Business Daily
edit:Oriental Wealth Network

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The “stock market correction call for the early release of multiple graded funds” was affected by the correction of the broader market index, and the large decline in the net value of the B-shares of multiple thematic rating funds was approaching a discount. (Beijing Business Daily)

Affected by the market index callback, many topicsGrading FundThe larger decline in the net value of the B share was on the verge of a discount. Beijing Commercial Daily reporter noted that on April 17th, Zhongrong Zhongguo Coal Index has been classified and investmentConvertible bondsGrade B funds, such as Tier, CSI Securities Fundamental 400 Index, and other rating fund B shares have issued discounted warnings, and issued risk warning announcements that may trigger non-periodic share conversion.

For example, Zhongrong China Coal Index classified securities investment funds in the announcement suggested that, due to the recent large fluctuations in the A-share market, as of the close of April 16, 2018, the net share of the share of coal B shares was close to the fund contract The share conversion threshold, urging investors to pay close attention to the recent fluctuations in the share of coal B share net reference value. The announcement pointed out that since the coal A share and coal B share may be discounted and discounted prior to conversion, the discounted premium rate for coal A shares and coal B shares may change significantly after conversion of non-periodic shares. Special requests are for participation in secondary market transactions. Investors pay attention to the risks of high premiums.

In addition, the coal B share is characterized by high risk and high returns, and its leverage will return to its initial leverage level after conversion of non-periodic shares. Since the reference value of the coal B share may be lower than the threshold on the day when the trigger conversion threshold is triggered, the conversion base date can be determined after the triggered threshold date. The net value of the coal B share on the basis of this conversion may be equivalent to the conversion threshold of 0.25 yuan. difference. The Zhongrong Zhongyue Coal Index Classification Fund also pointed out in the announcement that although the coal A share is characterized by low risk and relatively stable returns, the risk-return characteristics of the coal A share holders will be greater after the non-period share conversion. The change from holding a single lower-risk-return characteristic coal A-share to a lower-risk-return characteristic coal A share and a higher risk return characteristic to Zhongrong Coal's share, therefore coal A share holders Uncertainty in the realization of expected earnings will increase.

The data shows that on April 16th, the A-share market experienced a major correction.The Shanghai Composite IndexIt fell by 1.53% and once fell below 3,100 points in intraday trading. The share of Grade B funds with larger losses in the sector also fell into a sharp drop mode. Coal B and financial land B all closed at the low limit. On April 17th, the Shanghai Composite Index fell 1.41% again. Affected by the above-mentioned rating fund that has issued a discounted advance warning, it is also closer to the lower closing threshold.

According to the graded fund contract agreement, when gradingNet fund valueBelow a certain threshold (equipment-based rating fund set at 0.25 yuan, convertible bond rating fund set at 0.45 yuan), it will trigger downward conversion of the graded fund from time to time to ensure the contracted income of the graded fund A shares.

The data show that as of April 17th, the coal B-level is the closest to the lowering threshold, and the mother fund will trigger a lowering as long as it drops by 1.57%. In addition, the conversion of bonds, the Thai letter 400B, the new Silk Road B, etc. are also on the verge of a discount, the parent fund fell 5.77%, 7.07%, 9.25%, 9.91% will trigger off.

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                                (Editor: DF155)


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