Research On Announcement Effects And Influencing Factors Of Private Placement In China Listed Companies

Because the simple review process, low cost financing, issuing high success rate, private placement were sought after by Listed Companies in China.While the private placement financing model is popular in China's securities market,it also produced a lot of problems,such as the problems of controlling shareholder or the major shareholders to achieve transfer of benefits by private placement, related party transactions or price manipulation.These problems spawned insider trading behavior,and the insider traders earned extra returns.These insider trading will influence the stock price of listed companies,which was called the announcement effects of private placement.The announcement effects of private placement was defined as the stock price rise significantly before and after the announcement.Then what is the extent of the announcement effects and what is the impact mechanism?The focus of this study is to verify the existence of announcement effects of listed companies and to verify what factors will affect the announcement effects,and how these factors works.This paper based on the efficiency of capital market theory and domestic and international popular effect hypothesis, with the development course of China's listed companies, the mode and the advantages and disadvantages of private placement and its market development situation to the reality, then defined and described the announcement effects of private placement,and empirical analysis.This paper used the event study methods to analysis the abnormal stock returns 15 trading days before and 10 trading days after the announcement of the board of directors plan on private placement with 144 listed companys as the sample,and then used the abnomal returns as explained variables and the influence factors(the equity scale,the issue size,price discount rate,top 10 shareholder's,asset-liability ratio,the net assets yield) to be explanatory variables to resume regression model.This two experience inspections draw these conclusion that:firstly, during the board of directors issued the plan of private palcement, the announcement effects is positive and significant.Secondly,the equity scale, the issue size, price discount rate, top 10 shareholder's, asset-liability ratio and the net assets yield would significant influence on the announcement effects.Each of these factors all has a positive relationship with announcement effects.Based on the analysis of the experience, this paper gave some advise on improving the efficiency in China securities market, perfecting our private placement system and regulating Chinese investors' investment behavior with China's reality,and hope to instruct to practice.