BOC Convertible bond issue start market expected return optimistic

To replenish capital and raise the capital adequacy ratio, the Bank of China's 40 billion-yuan a-share convertible bond will be launched on May 31. On the evening of May 30, the SSE website issued a notice, said that the total issue of Bank of China Limited publicly issued a shares convertible corporate bonds (hereinafter referred to as "bank transfer debt"), each face value of 100 yuan, a total of 400 million.　　BOC's first day of transfer of debt to the stock price of 3.88 yuan per share.　　The Bank of China's transfer of debt to the original a-share shareholder priority of the registration date for the stake is June 1, 2010, the 2009 dividend payout Equity registration date is June 3, 2010. Prior to that, BOC 40 billion-yuan convertible bond issue was approved by the China Securities Regulatory Commission's issuing commission on May 24.　　Since the issuance of the convertible bonds coincides with the historical low valuation of the bank shares, the market analysis, BOC transfer debt will be with the BOC A shares is expected to bring huge returns for investors. Will not be diluted shareholders ' equity bulletin shows that the Bank of China to transfer debt to the higher proportion of shareholders in addition to the holding shareholders of the original a-share priority placements, a share of the Chinese bank A shares can give priority to placing 3.75 yuan convertible bonds.　　After preferential placing of the balance part (including the original A-share shareholder to give up the preferential placing part) use the net to the institutional investors placing and through the SSE trading system online pricing distribution, if the balance is the underwriting group underwriting.　　Analysts believe that the bonds under the convertible bond value as a guarantee, with the positive stock price of the rising income does not cap, set to the original shareholders preferential placement of the provisions can effectively protect the interests of the original shareholders. According to the announcement, the Chinese Bank of China on the former shareholders preferential placement of the terms, is not less than 50% of the proportion of shareholders in addition to the holding of the original a-share priority placements, and it is estimated that the final optimal proportion of the allocation of about 60%.　　If all convertible bonds are realized into shares, the share price of a shares will be expected to rise to 8.71%, and the shareholder structure of the bank can be further diversified by 4.02 yuan per share of the shares. Because the convertible bond is compared to the pure equity type financing, for the earnings per share, Roe and other indicators of the thinning has a lag and progressive, thus, BOC transfer debt in June 2010 completed, starting from the end of 2010 gradually to the stock, in accordance with the 4.02 yuan/share of the transfer of shares in the price calculation, BOC transfer debt after all to the stock,　　Earnings per share are about 3.77% diluted. However, according to statistics, researchers from nearly 20 institutions have made a profit forecast for BOC, which is expected to maintain a growth rate of more than 15% per annum in 2010, 2011 and 2012, and its own earnings growth has been able to offset the dilution of the issuance and transfer of convertible bonds.　　In view of the issuance of convertible bonds, the bank's capital growth will be able to support business more rapid growth, and bring further profits growth, the actual situation will be more optimistic than the forecast. Therefore, analysts believe that the convertible bond financing not only will not have a substantial impact on the overall operating indicators of BOC, along with the new capital brought about by the gradual effect of new revenue, BOC's shareholder valuewill be further enhanced.　　The issue of BOC's transfer of debt is of great concern, at present, based on the local government financing platform loan quality and its provision policy, real estate related policies and large-scale bank-intensive financing concerns, a-share market bank plate fell sharply, the current industry 2010 P/E and p/b only 11 times times and twice times, at a historical low.　　Data show that, as of May 28, boc A shares close to 4.01 yuan, corresponding to the 2010-year net net worth of 2.14 yuan per share of the market is only 1.88 times times, below the average level, but also lower than ICBC, CCB, and other listed state-owned large line of valuation level.　　The market analysis that the bank since the listing, the city's net rate of most of the time in more than twice times, BOC's current share price is obviously underestimated, the valuation advantage is very obvious, with a high margin of security, in the capital market stability will have a greater room to rise. At the same time, BOC's future growth momentum is ample. In the short term, expectations of a 2010 rate hike are increasing as domestic market liquidity increases and inflation expectations rise.　　From the previous interest rate increase, fixed deposit, loan interest rate increase is significantly larger than the current deposit rate increase, and the bank demand deposits accounted for about half of the proportion of deposits, so the legal deposit and loan interest rate increases, overall on the bank net interest margin level has a positive impact. BOC related people, from the domestic market, 2009 Bank of China Yuan company deposits, loans added 842.659 billion yuan and 846.474 billion yuan respectively, the growth rate of 49.22% and 50.25% respectively, the increase in the state-owned large commercial banks.　　From the international market, as the major economies have weathered the financial crisis in the most difficult time, the economic development began to gradually warmer, in this context, BOC's overseas operations will also be synchronized recovery, to contribute to the company's new growth point of achievement.　　In the long run, China's macroeconomic V-shaped reversal has been formed, consumption and exports continue to grow, the macroeconomic recovery is conducive to the growth of bank profitability and asset quality stability. Based on the above factors, market analysts believe that BOC issued a convertible bond at this time, and investors in the undervalued stock price investment in convertible bonds, not only can avoid short-term oscillation risk, but also share the growth of the bank's excess return. (Reporter Li Lan)