Source: Zhitong Finance

Recently, Chinese internet giants$JD.com (JD.US)$and$Alibaba (BABA.US)$Issuing huge amounts of convertible notes one after another, Zhang Qianjia, head of UBS's Asia Pacific private equity finance market, said that more companies may use convertible stock notes products to finance. She pointed out that the two giant companies have clearly stated that they will repurchase shares after financing, which will support the company's stock price.

According to reports, on May 21, JD issued an announcement on the Hong Kong Stock Exchange. The company announced that it plans to sell convertible senior notes due in 2029 with a total principal amount of 1.5 billion US dollars. On May 23, Alibaba issued a pricing announcement for the issuance of convertible senior notes. It will issue 4.5 billion US dollars of convertible senior notes due in 2031, with an interest rate of 0.5%.

Zhang Qianjia pointed out that the launch of the two giants started the entire capital market, allowing other companies to see that the market reaction was a positive change, and gave other companies the confidence to tap more demand within the market to complete the distribution. It is estimated that if some Chinese enterprises believe that their stock prices are low, they may also issue convertible notes.

Li Zhenguo, vice chairman of the UBS Global Investment Banking Department, said that after JD announced the issuance of convertible bonds, the stock price performance was stable, mainly because JD now issued convertible notes to buy back shares, which is good news for the market.

When asked if the recent rebound in the Hong Kong stock market would reduce the motivation of the majority shareholders to propose privatization, Li Zhenguo responded that although Hong Kong stocks have rebounded from a low level, if corporate stock prices and valuations are still viewed as low, it is estimated that the majority shareholders are still interested in proposing privatization.

edit/lambor