This paper studies the announcement effects of the convertible bonds of 50 listed companies in the A-share market of China. The result shows that there are significant negative effects when the convertible bonds are issued, in other words, issuing announcement of the convertible bonds can lead stock prices to decline. However, the significances of the negative effects are different in different markets, bond types, released years and time windows. The volatility of share prices in Shanghai Stock Exchange is less than in Shenzhen Stock Exchange, and the negative effects are more significant than in SZSE. The announcement effect of the ordinary convertible bonds is more significant than the convertible bonds with warrants.
Cite this paper
Wang, B. , Miao, J. and Wang, F. (2014) Research on the Announcement Effects of the Convertible Bonds in the A-Share Market of China. Modern Economy
, 333-340. doi: 10.4236/me.2014.54033
 Dann, L.Y. and Mikkelson, W.H. (1984) Convertible Debt Issuance, Capital Structure Change and Financing Related Information: Some New Evidence. Journal of Financial Economics, 13, 157-186.
 Kang, J.K. and Stulz, R.M. (1996) How Different Is Japanese Corporate Finance? An Investigation of the Information Content of New Security Issues. Review of Financial Studies, 9, 109-139.
 De Roon, F. and Veld, C. (1998) Announcement Effects of Convertible Bond Loans and Warrant-Bond Loans: An Empirical Analysis for the Dutch Market. Journal of Banking & Financing, 22, 1481-1506. http://dx.doi.org/10.1016/S0378-4266(98)00055-7
 Guo, X.W. (2001) The Effect of Convertible Bonds on the Company’s Stock Price and Its Empirical Research. (in Chinese)
 Wang, H.Y. and Xia, Y.P. (2004) An Empirical Study on the Effect of the Issuance of Convertible Bonds on the Company’s Stock Price. Central South University for Nationalities (Natural Science Edition), 2, 106-109. (in Chinese)
 Wang, Y.X. and Yang, J. (2011) The Analysis of Effect of the Issuance of Convertible Bonds on the Underlying Stock. Business Culture, 3, 177-178. (in Chinese)
 Tian, K. and Lao, L.J. (2004) A Study on the Wealth Effect of Convertible Bonds Issued by Listed Companies in China. Shanghai Management Science, 6, 8-10. (in Chinese)