The Study On The Influence Of The Desterilization Of Non-tradable Share On Chinese Capital Market

The Split-share Structure Reform has made it possible for unlisted shares to enter the secondary market gradually, which helps Chinese A-share market undergo a full circulation. However, after 3 years the desterilization of non-tradable share has become a big trouble which affects the development and stabilization of Chinese share market.The passage is studied by theoretical and positive analysis to explain the influence of Chinese share market from non-tradable share reduction. Firstly, it calculates the VaR of SSE Composite Index by EGARCH(1,1)-GED model, and shows that the risk of share market is up. Secondly, it explains some mechanisms from the desterilization of non-tradable share, including reducing non-tradable shares, the sheep-flock effect and some hostile takeover. Although, at the end of 2010, the deterilization of non-tradable share will be completed, the proportion of non-tradable shares lessening is very low. There will still be the risk of fluctuation of the stock price because of non-tradable shares lessening, and some new problems, such as new insider control, hostile takeover and so on. Therefore, how to standardize non-tradable lessening and perfect the market mechanism have a very important significance.