Analysis Of Large Shareholder's Behavior Of Chinese Listed Company From The Perspective Of Market Trading

With the non-tradable share reform, the large shareholders obtain the circulation rights, and their profit mechanism has changed greatly. To get capital gains by trading in the secondary stock market will be one of the main ways of earning their profits.After reviewing the relevant literatures, chapter three analyzed large shareholders'profit mechanism after full circulation and found their possible behavior changes. Then, from the perspective of revenue maximization, and based on stock evaluation model of PBV, large shareholder's profit function is established through a comprehensive consideration of large shareholder's tunneling behavior, propping behavior and trading behavior in the secondary stock market. And then a detailed analysis of the changes in large shareholder's behavior under the condition of full circulation is made. It is considered that large shareholders will seek capital gains income through the trade in secondary stock market after full circulation. The large shareholders'tunneling behavior, propping behavior and trading behavior in the secondary stock market will be affected by its shareholding proportion, the profitability and growth of listed companies, the degree of deviation between the stock price and the real value of it, the degree of supervision and the share proportion which large shareholders will purchase or sell in the future.In chapter four, the empirical study of the factors which influence the large shareholders'trading behavior in the secondary stock market shows that there is no direct correlation between the quantity of reduction and the listed companies' performance before selling. Whether large shareholders decide to sell the stock or not depends on the expected prospect of listed companies. But there is strong correlation between the purchase quantity and the listed companies'performance before buying. Most of the time, large shareholders will only purchase the stock of the listed companies which have good performance. When trading in the second stock market large shareholders will take advantage of the fluctuation of market and stock evaluation. Different types of large shareholders differ greatly in their trading behavior. The event analysis method is used to empirically study the stock price volatility due to trade announcement. The empirical result shows that large shareholders'trading behavior has signal effect. Large shareholders'selling behavior will bring about the fall of stock prices. And their buying behavior will lead to the support for stock prices. In different market environment, the signal effect of large shareholders'trading behavior varies greatly.In chapter five, based on the definition of "private benefit of control by capital gains", one method is proposed to calculate the controlling shareholder's "private benefit of control by capital gains". And by this method the regression model is established to test the controlling shareholder's arbitrage return in the secondary market between 2005 and 2010. The empirical results show that many controlling shareholders will sell stock at high price and buy at low price according to the fluctuation of stock market. Furthermore, in order to earn the excess return of "private benefit of control by capital gains", many controlling shareholders will make arbitrage through manipulating the listed companies'financial performance by virtue of controlling advantage or through knowing the listed companies'financial performance in advance.In chapter six, from the perspective of trading in secondary stock market, large shareholders'earning management, tunneling behavior and propping behavior before trading are investigated. The result shows that large shareholders will sell or buy the stock by means of information advantage which can help them foresee the irregular growth or decline of listed companies'performance; or in order to sell at high price, they will conduct propping behavior by means of controlling power to improve the listed companies'performance so as to increase stock prices; or in order to purchase at low price, they will conduct tunneling behavior to decrease the listed companies' performance so as to lower stock prices. Compared with the central state-owned large shareholders, before the selling, the private and the local state-owned shareholders conduct earning management more frequently and positively. The performance is greatly manipulated by private large shareholders before their selling. The stock price manipulation conducted by large shareholders before trading will seriously invade the interests of minority investors who trade with large shareholders.Chapter seven firstly analyzes the related trading rules on large shareholders buying or selling the stock of listed companies controlled by themselves. This paper finds that the related restrictions are too lax and the cost of regulation violation is too low to constraint large shareholders' trading behavior. Based on the above analysis, some policy suggestions are proposed to enhance the supervision of large shareholders' trading behavior after full circulation, including:we should constraint effectively the behavior of large shareholders which is involved with fluctuation of stock amount, the interval of trading, and the advance notice of trading; we should improve the relevant information disclosure system, and increase large shareholders' information disclosure obligations; we should establish the monitoring system to realize the real-time supervision to the daily transactions of large shareholders, actual controllers and their concert parties; we should change supervision method, strengthen legal supervision and law enforcement, and increase violation cost; we should establish information exchange platform for large investors to supervise large shareholders'trading behavior, so as to increase the probability of regulation violations being found and increase their violation costs.Chapter Eight gives a brief summary about the major arguments. At the same time, it probes into the insufficient aspects in the research and initiate direction for further researches in the future.