According to the operation process of bonds and the basic functions of the market, the bond market can be divided into issuance market and circulation market.
(1) Distribution market
The bond issuance market, also known as the primary market, is the market where issuers sell new bonds for the first time. The role of the bond issuance market is to distribute bonds issued by the government, financial institutions and industrial and commercial enterprises to the society and raise funds from investors. Simply put, it is a place to raise funds by issuing bonds.
There is no fixed place and unified time in this market, which can be regarded as an invisible market. We don't need to delve into this point, because we usually buy bonds from entrusted underwriting institutions, and it is difficult and rare to buy bonds directly from issuers.
(2) Circulation market
Also known as the secondary market, it refers to the market where issued bonds are sold and transferred. Once the bonds are subscribed, the creditor-debtor relationship will be established within a certain period of time, but through the bond circulation market, investors can transfer the creditor's rights or realize the bonds. Bond issuance market and circulation market are complementary and interdependent whole.
Bond issuance market-primary market
I. Overview and classification of the primary bond issuance market
The bond issuance market is mainly composed of issuers, subscribers and entrusted underwriting institutions. As we said before, as long as you are qualified to issue bonds, no matter the country, government agencies and financial institutions, or companies, enterprises and other legal persons, you can borrow money by issuing bonds. Subscribers are the people we invest in, mainly social public organizations, enterprises and institutions, securities institutions, non-profit institutions, foreign state-owned enterprises and institutions and our families or individuals. Entrusted underwriting institutions are intermediaries that handle bond issuance and sales on behalf of issuers, mainly including investment banks, securities companies, commercial banks and trust and investment companies. There are three ways to issue bonds: public offering, private offering and underwriting.
According to the criteria of whether financial intermediaries participate in the sale, the issuance of government bonds can be divided into direct issuance and indirect issuance, of which indirect issuance includes four ways: consignment, underwriting, bidding and auction.
Direct issuance generally means that the Ministry of Finance, as the issuer, issues bonds directly to specific institutional investors, also known as private placement. The bond circulation of this marketing method is generally not too large. As the Ministry of Finance, the issuance of national debt is relatively large. For example, the United States issues US$ 654.38+00 billion of medium-and long-term treasury bonds every week, and China issues at least tens of billions of RMB. It is difficult for issuers to directly promote huge national debt, so this issuance method is rarely used.
Consignment means that the issuer of government bonds entrusts an agency to sell bonds to the society, and can make full use of the agency's outlets. However, since the agent only sells on behalf of the issuer within the agreed date according to the pre-determined issuance conditions, if there is any unsold balance at the end of the consignment period, it will be returned to the issuer, and the agent will not bear any risks and responsibilities. Therefore, the consignment mode is not satisfactory:
(1) cannot guarantee the formation of reasonable issuance conditions according to the supply and demand situation at that time;
(2) The marketing efficiency is not satisfactory;
(3) The issue period is longer, because there are restrictions on the pre-sale period.
Therefore, consignment issuance is only applicable to situations where the securities market is underdeveloped, the financial market is out of order, and institutional investors lack underwriting conditions and enthusiasm.
Underwriting and underwriting means that a large number of institutional investors form an underwriting syndicate to underwrite the treasury bonds of the Ministry of Finance under certain conditions, and the underwriting syndicate is responsible for resale in the market, and any unsold balance is underwritten by underwriters. The characteristics of this issuance method are as follows: (1) The original intention of underwriting is to ask the underwriters to resell to the society, the terms of issuance are determined by the Ministry of Finance as the issuer and the underwriting syndicate, and the national debt can only meet the investors after all the underwriting procedures are completed, so the underwriters exist as an intermediary between the issuer and the investors; (2) Underwriting is a sign of issuing government bonds by economic means, and the conditions of issuance can be determined through bidding, which is a form of turning the issuance of government bonds into marketization.
Public bidding means that the Ministry of Finance, as the main issuer of national debt, directly invites large institutional investors to bid. After winning the bid, investors have no obligation to sell to the society, so the successful bidder is the national debt subscriber. Of course, the winning bidder can also sell it to the society at a certain price. Compared with the underwriting issuance mode, the public bidding issuance not only realizes the direct meeting between the issuer and investors, reduces intermediate links, but also fully embodies the market mechanism such as competition through the independent bidding of investors for the issuance conditions, which is conducive to the formation of fair and reasonable issuance conditions, shortening the issuance cycle, improving market efficiency and reducing the issuer's issuance cost. It is a further deepening of the marketization of national debt issuance methods.
Auction issuance refers to the public auction of government bonds to investors under the auspices of the issuer in the auction market according to the conventional and regular auction methods and procedures, and the issue price and interest rate of government bonds are completely determined by the market. The auction issuance of national debt is actually a more market-oriented way based on public bidding, and it is a sign that the national debt issuance market is highly developed. Because this issuance method is more scientific, reasonable and efficient, it is widely used in the issuance of national debt in western developed countries.
In fact, it doesn't matter to investors anyway, and there is still a handling fee to subscribe for government bonds in the issuance market.
II. China Bond Issuance Market
The first bond issued in China was issued by the Qing government to officials and businessmen in 1894 to meet the needs of the Sino-Japanese War. At that time, it was called "interest loan" with a total issuance of more than two million silver Ll. After the Sino-Japanese War of 1894-1895, the Qing government issued bonds to pay reparations, totaling 654.38 billion taels of silver (then known as "Zhao Xin shares").
Since the Qing government began to issue bonds, successive governments in old China issued a large number of bonds to maintain fiscal balance. The Beiyang Government, Nanjing National Government, Wuhan National Government and Chiang Kai-shek Government successively issued dozens of bonds.
After the founding of New China, the Central People's Government issued "People's Victory Discounted Bonds" in June 1950 and June 1, and the actual issuance amount was equivalent to RMB 260 million. The principal and interest of the bonds were fully paid off on June 1956+0 1.30. In 1954, China issued the "National Economic Construction Bond", and in 1958 * * a total of five issues were issued, with a total issue of 3.935 billion yuan, which was fully paid off in 1968. In the following 20 years, China did not issue any bonds, and was in a special period of "no external debt and no domestic debt".
After the Third Plenary Session of the Eleventh Central Committee, the work center of the Party and the government turned to economic construction. 19811016 passed the regulations on the organization of people's treasury bills in China, and the Ministry of Finance began to issue treasury bills to balance the fiscal budget, targeting enterprises, organs, organizations, troops, institutions and individuals. By the end of 1997, it has been issued continuously for 17 years.
1987, in order to promote the national infrastructure construction and raise medium and long-term construction funds for large-scale projects, China issued three-year key construction bonds to local governments, local enterprises, government agencies, institutions and urban and rural residents, with a total issuance of 5.5 billion yuan. 1988, in order to support national key construction, China issued two-year national construction bonds, targeting urban and rural residents, foundation organizations, financial institutions, enterprises and institutions, with an issuance amount of 8 billion yuan.
1988, in order to make up the fiscal deficit and raise construction funds, China issued financial bonds again, which was issued five times in 1992 * *, with a total issuance of 33.703 billion yuan. Except for the 3-year bonds and 5-year bonds issued by 1988, all other years are 5-year bonds. The issuers are mainly specialized banks, comprehensive banks and other financial institutions.
From 65438 to 0989, China government issued special bonds only for enterprises and institutions, not for individuals. The bonds are issued in four installments from 1989 to 199 1 * * with a term of five years.
65438-0989, after the banks implemented the interest rate policy of hedging subsidies, the Ministry of Finance began to issue hedging bonds combining hedging subsidies. The planned issuance amount is 654.38+0.25 billion yuan with a term of three years. The distribution targets are urban and rural residents, individual industrial and commercial households, various foundations, insurance companies and qualified companies. Its annual interest rate fluctuates with the bank's three-year fixed deposit interest rate, plus the value-added subsidy interest rate, plus 654.38+0 percentage points. The value-added bonds of 654.38+0989 have actually issued 8.743 billion yuan, but not all of them have been issued.
1988, the state special investment company, the Ministry of Petroleum and the Ministry of Railways also issued capital construction bonds with a total amount of 8 billion yuan, which were issued to four major national specialized banks for a period of five years, and 1989 and14.59 million yuan were issued to urban and rural individuals nationwide for a period of three years.
With the development of the national debt market, financial bond and corporate bond markets came into being. 1984, corporate bonds began to appear in China. At that time, some enterprises spontaneously raised funds from the society and employees within the enterprise. 65438-0987, some large domestic enterprises began to issue key corporate bonds. 65438-0988 Key corporate bonds are issued by national specialized banks on behalf of national specialized investment companies. After that, short-term corporate financing bonds, internal bonds, housing construction bonds and local investment company bonds appeared in China.
From 65438 to 0985, China Industrial and Commercial Bank and China Agricultural Bank began to issue RMB financial bonds in China. Since then, banks and trust and investment companies have successively issued RMB financial bonds. 199 1 year, People's Construction Bank of China and Industrial and Commercial Bank of China issued 1000 billion yuan of national investment bonds, 1994, with the establishment of various policy banks, policy financial bonds began to appear. During the period of 1996, some financial institutions began to issue special financial bonds in order to raise funds to repay the debt of irregular securities repurchase.
1982, China began to issue bonds in the international capital market. In that year, China International Trust and Investment Corporation issued a samurai bond of 1000 billion yen in Tokyo. Since then, the Ministry of Finance, banks, trust and investment companies and related enterprises have successively entered international bond markets and issued foreign bonds and European bonds in Japan, the United States, Singapore, Britain, Germany, Switzerland and other countries.
In the 1990s, the circulation of China's bond market increased year by year, the types of bonds were gradually enriched, and the market-oriented issuance method and interest rate structure were constantly improved, especially in the national debt market.
Column: bond issuance code
Among all kinds of bonds, the code of national debt is the most regular, with 1996 as the boundary. Prior to this, the code of Shenzhen national debt was "year number" (the last two digits of the issue year)+"year". For example, Shenzhen National Debt 84 10 stands for 1984. The code of Shanghai bond is "000"+"fixed number of years"+"number of years" (the last two digits of the issue year). For example, the five-year bond issued by Shanghai Bond 000590 on behalf of 1990. Starting from 1996, the last digit of the code no longer represents the number of years, but represents the number of government bonds issued (the code of government bonds issued before 1996 remains unchanged), such as Shenzhen government bonds 1968, which represents the eighth issue of government bonds issued in 1996; National debt 1995 stands for15-year national debt issued in 1999. The third national debt issued by Shanghai National Debt 009703 on behalf of 1997; The eighth national debt issued by Shanghai National Debt 009908 on behalf of 1999.
The codes of corporate bonds and financial bonds are arranged according to the grade codes of bonds issued by enterprises (or financial institutions) and the total number of such bonds issued in the current year, which is relatively irregular.