Empirical Analysis On The Performance Change Of The H-share Companies Returning To A-share Market

It meant a lot to 2007.There were 11 overseas-listed Chinese companies returning to their home country for financing successfully during this year.By March in 2008,the number of these companies has reached 48.With the returning of these heavy-weight enterprises,the ability A-share market shown has put off "growth pressure" of stork market.However,there is still a lot of dispute whether such practice is motivated by a desire to "rake in money".The shadow existed in investors mind can do harm to the development of China's capital market.With the ever development of capital market, investors will become more and more rational,will pay more attention to company's performance and its value.There is now a change over the capital market from the old to the new.Against this major background,by building a complete performance evaluation system,this paper has provided a full and systematic description and analysis of the performance of Chinese companies after returning to their home country.I believe it is useful to present development of capital market.This paper separates the H-share companies into two groups:returning before the promulgation of the Securities Law in 1999 and after the promulgation of the Securities. There are two empirical analysis methods:Univariate Effectiveness Measures and Multivariate Effectiveness Measures.Univariate Effectiveness Measures include two indicators:return before interest and tax on asset and return on equity,to be abbreviated as ROA and ROE.They are very representative.ROE is a rigid target to stock issue;and ROA is more comparable and representative because it rules out unproductive interference factors.This paper has arrived at the following conclusions after research: the performance of the H-share companies returning before 1999 was decreasing obviously during the first four years after returning,then stable in the last three years, but far below the performance before returning.On the contrary,the performance of the H-share companies returning after 1999 is increasing obviously after returning,then stable in the last three years,and much higher than the performance before returning.In order to fully reflect the performance before and after returning,we use Principal Component Analysis to build a multivariable comprehensive evaluation function,and provide a description and analysis of the function.It reaches the same conclusion basically.These two conclusions show China's securities market is in the continuous development and progress;the policy of encouraging H-share to return A-share market is acceptable.However,China's securities market is still at the initial stage of development,there are many instabilities.In order to remove all these instabilities,we need policy innovation,system innovation and legal system innovation.Therefore,in the end of this paper,I give some policy recommendations.