Core Viewpoint - The implementation of the asset management regulations has initiated a significant transformation in the banking wealth management sector, shifting from a rigid expected return model to a dynamic net value model, which reflects real-time asset price fluctuations [1] Group 1: Policy Background and Market Environment - The transition to net value management can be divided into four stages, culminating in 2022 when the valuation method was unified to market value, effectively eliminating capital-protected wealth management products [2] - The bond market experienced a stable issuance volume in 2022, with an increase in high-grade credit bonds, amidst a macroeconomic environment characterized by real estate downturns and pandemic-related pressures [2] Group 2: Theoretical Mechanism and Research Hypotheses - The net value transformation directly transmits bond market price fluctuations to product net values, leading to a reduction in the previous smoothing effects [3] - The research hypothesizes that the net value transformation will lead to an expansion of credit spreads for long-duration bonds, primarily driven by duration shortening and liquidity decline [3] Group 3: Research Design and Data Basis - The study utilizes daily trading data of listed corporate bonds from two distinct periods to analyze the impact of the net value transformation on credit spreads [4][5] Group 4: Main Empirical Results - Post-transformation, the credit spread for long-duration bonds significantly widened by approximately 171 basis points, confirmed through various robustness tests [6] - A notable decline in average daily trading volume for long-duration bonds supports the hypothesis that liquidity deterioration is a key mechanism behind the widening credit spreads [6] - The analysis reveals a divergence in credit spreads based on issuer quality, with state-owned and high-profitability entities experiencing narrowing spreads, while non-state and low-profitability entities faced widening spreads [6] Group 5: Conclusions and Policy Recommendations - The study concludes that the net value transformation has significantly widened credit spreads for long-duration bonds, with liquidity decline as a primary transmission mechanism [7] - Recommendations include enhancing valuation regulation, optimizing liquidity management for wealth products, establishing a diversified bond valuation system, and improving market liquidity and pricing efficiency through better market maker mechanisms [7]

Core Insights - The paper "Bonds vs. Equities: Information for Investment" explores the structural relationships between common financial indicators such as stock volatility, asset volatility, credit spreads, leverage ratios, and Tobin's Q, and their connection to corporate investment behavior [2][3] Group 1: Key Findings - Credit spreads and asset volatility are the only indicators with a clear predictive direction for corporate investment: credit spreads negatively impact investment, while asset volatility positively influences it [2][3] - The positive relationship between asset volatility and corporate investment challenges the traditional view that uncertainty suppresses investment, providing a new perspective [3] - The study emphasizes that controlling for leverage does not adequately reveal the positive effect of asset volatility on corporate investment, questioning the common practice of treating leverage as a control variable [3] Group 2: Implications - The findings suggest that scholars in finance and macroeconomics, market practitioners, and policymakers should consider the structural relationships between common risk indicators and leverage when discussing market risk, capital structure, and investment analysis [4] - The research provides new insights for understanding and predicting corporate investment behavior, highlighting the importance of distinguishing between the signals conveyed by different financial indicators [4]