China's structured equity market is set to double in size as issuers turn to convertible bonds amid volatile market conditions and major shareholders opt for exchangeables to dodge a ban on stake sales. According to Citic Securities, 14 companies are looking to issue CBs or EBs to raise a combined Rmb50.35bn (US$7.69bn), or more than the combined outstanding principal of about Rmb44.56bn in the equity-linked market. "Under the current market conditions, it is difficult for issuers to raise funds through private share placements in China," said Joseph Chee, co-head of corporate client solutions, Asia, at UBS. "So, some issuers would consider issuing convertible bonds instead because there is huge demand for equity-linked products."
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