The Empirical Study Of Listed Companies' Stock Market Reflection About Refinancing In China

The establishment, survival and development of a company are based on the capital, and capital is the lifeblood of the growing of business. The rapid development of modern economy allows businesses not only rely on their own profit to realize the development, but also, more and more of them are getting the opportunity to accelerate the pace of progress by seeking capital in market. For investors, only if they can understand the law about how the market will respond to various information exposed by companies and the reasons hided in it, and also can comprehend the complex financing environment, will they operate actively in capital market.First, the article has systematically summarized the relative theories of finance. Then I did some research on stock price changes according to different kinds of refinancing announcement through empirical method. In the empirical analysis, this paper divides the refinancing action into two categories, corporate bond issuance and seasoned equity offering respectively. Again, we divide the seasoned equity offering into secondary public offering, placing and rights offer. Here, we pick up China and the US, the two important global economy entities, to do analysis on their stock market reaction to refinance. According to the result of the empirical test, we interpreted and gave reasons to each situation one by one. In the following comparison, we get the conclusion that Chinese and the US market tend to respond in the same way in most of time. However, there are some differences. The difference mainly exists in placing, and then, there is also some difference without significance in corporate bond. After the comparison, the article has analyzed the direct reasons that cause the difference. That is because the people hold investment idea in the US, while in China, people focus on speculation. But we didn't stop here, instead, we continued to do research and found out the deep reason behind the problem. Understanding the problem, I suggest that we China should pay importance on improving and perfecting financial regulatory system. At the same time, Chinese government should work hard on educating the population to make sure the small shareholders have enough knowledge to invest in financial market.The innovation of the article is that we not only focused on Chinese market, but also did research on the most developed country in the current world, the US, and do comparison between the two countries. In addition, most scholars divided seasoned equity offering into secondary issuance and rights offer while I further divided the secondary issuance into secondary public offering and placing. Furthermore, during the empirical analysis, I made use of the latest data which ended June 30th,2010, making the article more convincing.