March 4, 2026 - Convertible Bond Rebalancing

PortfolioAlert · 2026-03-04T00:33:39+00:00

Investors should buy convertible bonds when market sentiment is low to maximize potential returns. Although current convertible bond positions are already low, the market remains volatile, with significant declines in both convertible bonds and A-shares yesterday. Trading volume in convertible bonds has increased, with some individual issues being active. Recently, attention should be paid to market hotspots and relevant policies, and a diversified investment strategy should be maintained to reduce risk.

PortfolioAlert

2026-03-04 00:33:39

Abstract generation in progress

Investing is a popularity contest. Buying at the peak of popularity is the riskiest, as all positive factors and opinions are already priced in, and no new buyers will appear…

The safest and most profitable investments are made when no one likes them. Over time, once a stock becomes popular, its price can only move in one direction: up!

Since personal convertible bond holdings account for less than 45% of the total portfolio, which is already at the lower limit, I do not plan to reduce holdings proactively. However, I was still forced to cut positions last week, so maintaining the portfolio is indeed challenging…

Yesterday’s overall market performance:

The previous trading day: Convertible bonds fell, A-shares fell, US stocks fell, FTSE A50 fell. US stocks initially declined then rebounded last night, narrowing the decline. External factors continue to influence the market. After a big drop yesterday, can it stabilize today?

The convertible bond index dropped from 2090 on February 13, 2023, to 1753 on February 5, 2024. Now it’s at 2701. The median is 139.9, temperature 91.1 degrees. There are 275 convertible bonds above 130 yuan, 13 fewer than the day before, accounting for 75.3%. There are 11 below 110 yuan, 3 more than the previous day, with prices at a low of 0 and a high of 6; March saw 2 green and 0 red convertible bonds.

Convertible bond trading volume reached 76.8 billion, up 4.5 billion from the previous trading day, with a turnover rate of 15.2%, reaching 700 billion for the fifth day. The index fell 63 points to 2701, with an average price of 161.3, down 4.5 from the previous day. The median premium is 32.9%, slightly higher than the previous day by 0.4. A-shares traded 3.158 trillion yuan, 110 billion more than the day before. Yesterday opened low and declined further, moving southeastward, ultimately falling sharply. Sentiment for convertible bonds remains high; some traders are maintaining positions.

Yesterday, Tianhao rose 16.8%, leading gains. Trading concentration increased, with the top 5 bonds accounting for 19.7% of total convertible bond trading volume, with the highest single trade at 5.5 billion. Most bonds saw decreased activity, with the number of bonds traded below 10 million dropping from 0 to 1. The minimum trading amount decreased from 11.49 million to 8.19 million.

Today’s convertible bond and market-related information:

SaiLong: last trading day. BaRun: downscaled to the bottom. QiaoYin: downscaled. BaRun convertible bond: downscaled to the bottom. LingGang: last trading day on April 7, 2026. HaiFeiMan: new stock listed on Beijing Stock Exchange. XianLe: no downscale.

AiDi: main product prices increased. WeiCe: revenue increased in the first two months. TianYuan: invested 369 million yuan in a project. AoWei: subsidiary may have a contract worth 228 million yuan.

Today, Diu Garden may meet the redemption condition with one more day; today, Wu may also meet the condition with one more day, potentially triggering downscaling.

No new bonds, no new stock subscriptions, no convertible bond subscriptions today. Focus today: ShuangLiang, SanFang, whether convertible bonds can stabilize, etc.

WanTian, LanTian, and other trends remain positive; continue to monitor. Also watch for relatively low-priced stocks like ShanShi, HengFeng, HaiBo, HuaXing, etc.

Summary of information:

Over the weekend, the US launched military strikes on Iran, Iran closed the Strait, causing continuous rises in oil-related stocks.
Two domestic meetings will open this week.
Expected hot topics: Power grid equipment (Jin05, JingDa, HuaChen, JiaZe, YuBang), Space photovoltaic (ShuangLiang, Fu22, AoWei, DiEr, RuiKe, Tian23, Long22), AI applications (FengYu, DingJie, ShengXun, JiZhi, RunDa, GuanZhong, YaoJi, KeLan, SiTe, PuLian), Commercial aerospace (GuangLian, Zai22, HuaTi, ShenYu, MengSheng, HangYu), Chemical industry (BaiChuan2, HongQiang, JinJi, HeDa, QiXiang2), Chips (LiYang, MaoLai, LuWei, HuiCheng, JingRui2, AnJi, YangGu), Photolithography (JingRui2, HuaTe, HuaMao, QiangLi). Also keep an eye on humanoid robots and related concepts.

Yesterday, convertible bonds opened low and declined sharply, with increased trading volume. Today, expect moderate decline. The theme has trading opportunities; overall prices and premiums are high, with some traders engaging in T+T.

Last weekend’s bond selection (personal record, not investment advice): Due to high median levels, I relaxed the selection criteria somewhat! Overall quality improved compared to last week, considering volatility capacity. Still optimistic about the market and prepared to hold some convertible bonds, focusing on relatively low prices, small caps, and concept-rich active stocks, mainly for broad allocation, not single-position recommendations:

Micro-cap convertible bonds around 130 yuan (under 300 million) can be included: Silk Road…
Bonds under 150 yuan, under 200 million, with limited downward volatility, high potential for premium, high upper limit, small retracement, excluding recent strong redemption risks: Ailu, HaiBo…
Relatively low-priced, low-premium bonds around 145 yuan, with about 30% premium, maturity between 0.5-5.5 years, suitable for swing trading: TianHao, JinPu, WanTian, StrongPower, LanTian, WanXun, Mino, YinWei, LiHe…
Aggressive low-price, around 150 yuan, with about 20% premium, under 500 million, ensuring certain profit/loss ratio: HengFeng, FengShan…
Pure offensive bonds, premium around 15%, around 160 yuan, scale about 400 million, excluding those likely to be redeemed within two weeks: None…
Defensive bonds, moderate premiums (~70%), not relying solely on downscaling, market cap under 1 billion, yield around -3%, with diverse concepts: ZhiBang, GongTong, KeSi, BaiChang, XinNeng, ZheJian…
Personally focused on active, concept-rich bonds with moderate prices, around 145 yuan: KeLan, ShanShi, LiHe, JingRui2, YiRui, JinTian, HongWei, WeiTang, ChaoSheng, Mino, MingLi, BaiRun…
Bonds with strong credit features, suitable for those unwilling to hold cash: ShenHao, FuHan, JieTe, LiGao, JianFan, Shou22, KangYi, LiZi, Mars, Tai21, YuXing…

Recent adjustments in convertible bonds include some meeting redemption conditions in a few days, but some may not, and premiums have been reduced accordingly, e.g., Diu, Garden, HongQiang, HuaXing, WeiTang, HangXin, GuangLi, SanJiao, AiDi, JinJi, ChangHai…

Current market conditions show significant redemption pressure, limiting upside potential, so avoid overly expensive bonds.

Overall strategy: avoid deep research, focus on broad allocation, ride volatility, adopt a whack-a-mole approach, use wide coverage instead of deep, hedge risks, pursue average returns, and consider conditional orders and grid trading to utilize market fluctuations. Do not recommend specific holdings; all selections are personal summaries. Investing involves risks; enter cautiously.

Stay true to the original purpose of convertible bonds. Currently, they are very suitable for retail investors. Convertible bond investing is a marathon; stick to the right path, stay away from hype. This is the truth and the cause-and-effect. All phenomena are like illusions, like a dream, like bubbles, like lightning. Observe with equanimity, do not dwell, and cultivate a calm mind. Water droplets may be tiny, but they gradually fill a large vessel…

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

1 Likes