A Study On Convertible Bond Financing Selection And Market Timing Of China's Listed Companies

Listed companies issue convertible bond became a hot topic in these years, but the relevant researches of the China's listed companies convertible bond financing can not break through the traditional financial theory and can not fully explain the phenomenon of convertible bond financing, This paper inducts the market timing theory, based on the actual status of China's securities market to study the convertible bond financing of China's listed companies.In this paper, the study sample is the listed companies which issued convertible bonds from 2002 to 2007.first of all, the cumulative abnormal return using indicators to describe the company's convertible bond price changes in China's listed companies on the convertible bond financing market is right there is an empirical test. Empirical results show that in the short term, convertible bonds listed on stock prices before the market really has been underestimated, China's listed companies convertible bond financing is the existence of market timing, long-term point of view does not exist. Followed by the use of single factor analysis and binary Logistic regression model for China to issue convertible bonds and season equity offerings companies' test data and found that the traditional theory on behalf of the variables, in addition to asset-liability ratio and the relative financing size ,others have not an important impact on financing options, the growth ratio of main operating income and shares held ratio of the largest shareholder is not significantly affected. And market timing variables market net value ratio, handover and equity returns ratio in the previous year was significantly high. Market net value ratio financing options and convertible bonds negatively correlated ,in the 5% level significantly, Turnover and convertible bonds negative correlation, significant level is 10%, the previous year rate of return on stocks and convertible bonds are related to financing options, In the 5% level significantly. Market timing have an important impact on China's listed companies financing of convertible bonds, market timing can be a very good explanation of the theory of China's listed companies act convertible bond financing.At last, this paper analyzed the problems of China's convertible bond market, the corresponding countermeasures and suggestions for management decision-making reference to the stock market.