Changes On Stock Evaluation System Of Chinese Stock Market Under The Process Of Full Circulation

The shareholder reform launched in 2005 has opened a new era in the Chinese stock market,then Chinese stock market has undergone a bull market in 2007 and a bear market in 2008. Lifting of non-tradable shares was considered to lead to huge stock market volatility ,as an important factor. After most non-tradable shares were lifted in 2008 and 2009, the full circulation time of Chinese stock market is coming. Under the circumstance of full circulation How the behavior of shareholders will change, and how Chinese stock market valuation system will change? Research on these problems has important theoretical and practical significance.This paper first analyzed micro-mechanisms on how Lifting of non-tradable shares will change Chinese stock market valuation system from three perspectives, namely (1) lifting the ban on non-tradable shares of stock will have affect shares supply; (2) from the Tobin Q arbitrage mechanism perspective; (3) the dynamic incomplete information game between two types of shareholders will also profoundly affect share price and valuation system. Then, the paper analyzed price manipulation during reduction of holding and full circulation and proposed some measures to prevent the price manipulation.In conclusion, industrial capital will play more substantial role in the pricing system of shares,China's stock market valuation system will be gradually more reasonable,some shares will be cherished and some others will be abandoned. However, this process is not easy.Many problems need overcoming, in particular regulatory authorities need to respond promptly and take effective measures.