The Research On Balancing The Interests Of Stakeholders In Seasoned Equity Offerings In Chinese A-share Market

Seasoned Equity Offerings is an important way to optimize the allocation of resources in the capital market and becomes the first refinancing tool of China's A share listed by companies with its inherent advantage. With the continued development of China's capital market and the continued improvement of level of regulation, Seasoned Equity Offerings in the capital market will play a bigger role. However, due to the unique ownership structure, and the lack of effective mechanism to protect the interests of investors in the securities market, issuing new shares will have an impact on its stakeholders. This paper analyses the impact of Seasoned Equity Offerings on stakeholders from both theoretical and empirical angle, and explores appropriate ways to protect the interests of minority investors.Seasoned Equity Offerings involves mainly the interests of no-public shareholders, old public shareholders and new public shares. Under the two-dimension equity structure, they have different ways to realize their interests. No-public shareholders realize their interests mainly through premium issue, net assets appreciation and money bonus. While for other shareholders, they can sell their stocks at the secondary market and make them cashed at any time. The fluctuation of stock price is very critical, and minority investors pay attention to the sustainable development and promotion of the listed company. As old public shareholders and no-public shareholders of the subscribing costs are different, when company is issuing new shares, the interests of old public shareholders would be jeopardized, no-public shareholders will benefit. Pricing affects the interests of relevant investors and is the primary means of influence. How to decide adopting high price or low price can be judged by the discount rate, which compares issuing price with one of secondary market. Currently, many Chinese listed companies are issuing new shares by the way of using large discounts rate, which have had a greater impact on its stakeholders and the stock market.In order to avoid Chinese listed companies use Seasoned Equity Offerings to make an additional profit and damage the interests of minority investors. This paper analyses the wealth redistribution effect of different stakeholders from the current pricing mechanism and the related theory. On this basis, Article take Net Asset Growth Rate to investigate effect of Seasoned Equity Offerings on interests of no-public shareholders, and use Excess Rate of Return to investigate effect of Seasoned Equity Offerings on interests of old public shareholders and new public shareholders. This paper, which use the data of China's A share of issuing new shares from 2007 to 2009 , analyses the interest of no-public shareholders, old public shareholders and new public shareholders through the empirical method and afford ppropriate recommendations for improvement.