Event Studies In Announcement Effect Of Private Placement In Shanghai Market Of China

With the rapid development of China's capital market, listed companies' demand for equity refinancing constantly increase, while their financing preference share placement financing and the public from additional funding shift for the private placement financing. Issuance of the last three years has been directed to replace the non-directed to issue additional shares of listed companies to become the first choice to refinance.From May 2006 to April 2009,156 listed companies of Shanghai A market plan to implement a private placement announcement. From May 2006 to April 2009, directed issuance of the way of corporate finance accounted for 36% of the proportion of equity financing in the enterprise accounts for about 78% of the proportion. The data illustrate the reality of this private placement financing of an important position. This is directed to implement additional plans for 156 listed company announcements, in the notice before and after showing a rising trend of listed companies, a total of 55, accounting for the implementation of targeted plans for additional notice of listed companies 35%,the remaining 101 listed companies in the private placement announcement occurred before or after the trend of decline, accounting for the implementation of plans for issuance of notice directed 65% of listed companies, which means that most of the additional plans for the implementation of targeted companies notice the trend of a negative market reaction to. The study abroad have been directed issuance announcement effect is positive, in other words, the market reaction should be a positive trend. China's private placement announcement effect today? And abroad, whether there are differences really? What is the reason leading to the difference? Aroused the author's interest. The author of the Shanghai Stock Market A-share market through the 156 listed companies sample screen Election, obtained a sample of 120 eligible applicants, through the analysis of event study method to study the issuance of the notice of listed companies directional effects, in the hope that hope to help the investors to take full advantage of information; to help regulatory authorities to take appropriate measures to, regulate the securities market operations.This essay is divided into six parts:Introduction, theoretical foundation, directed issuance of notice effect of study design, the excess rate of return test and the results analysis, research findings, policy recommendations. Full use by the general to the sub and then to the general approach to writing, first raised the issue needs to be examined, drawing on experience of previous studies, and through the collation of data from studies in various conclusions, and finally summarizes the conclusions and recommendations for the conclusions. As follows:The first chapter is the introduction of this article. This article describes the background and significance of writing a clear definition of the private placement, characteristics and types of domestic and international orientation are summarized announcement effect of additional literature review, described the purpose of this research, content and structure, and this chapter of innovative and inadequate. Directed additional announcement effect of foreign research results, directed issuance announcement effect are positive. Our study, the research under limited conditions, as well as additional targeted a specific individual study, directed issuance of the announcement effect is also positive. This paper has collected since 2006 in line with the conditions of samples, Found that the additional orientation before and after the company announcement effect some positive, some negative, with the previous findings of foreign or domestic, there are some differences, the authors proposed issuance announcement effect on the overall trends directed to do some research, and The specific reasons for the analysis and interpretation.The second chapter is the theoretical basis of this study. Prominent examples out of asymmetric information theory, capital asset pricing theory, price pressure hypothesis and the wealth redistribution hypothesis. The process has the additional directional information asymmetry in nature. The capital asset pricing theory, the expected rate of return for individual assets, the confirmation is directed to confirm the basis of additional metric. Orientation before and after issuance of notice significant changes in the share price, in some cases in line with price pressure hypothesis that an increase in the supply of any of the securities will result in the theory of its price decline, and some run counter to the redistribution of wealth is not fully consistent with the hypothesis in the IPO price announcement will be have negative effects, the new bond issuance announcement will generate positive effects of price theory.ChapterⅢis the effects of research design directed issuance of notice. This chapter is part of the study design, completed the establishment of research methods to study the establishment and sample selection hypothesis three areas of work, in order to pave the way for empirical analysis of ChapterⅣ. Event study method introduced in detail the steps:First, make sure the event period, this paper plans announcement day of issuance of direction to change the base date of the incident to the benchmark 10 trading days before and after the incident for the study period; and then estimate the excess rate of return, this first adopt a market-adjusted model method estimates the expected rate of return, and then calculate the average excess returns and cumulative excess rate of return. A single sample T test statistical methods to test the event period, the average excess returns and cumulative average excess return is significantly non-zero, using independent-samples T test statistical methods to test samples of different groups, the average excess returns and cumulative average excess return Does the rate significantly different from.Chapter IV is the empirical testing and results analysis. This chapter describes the use of SPSS 13.0 software and Microsoft Excel2003 directed issuance of notice to the effect of sample companies to conduct the process of empirical testing, and empirical results are analyzed and explained. The results include: parties, including major shareholders to subscribe for additional market reaction is more strongly directional, but the market reaction is negative; the subscription side, including institutional investors to become more able to generate significant market reaction, but the market reaction is not necessarily positive.Chapter V gives a specific conclusion of the study. First, the directional plan for additional notice of the incident there was a significant market reaction, the market reaction is negative, the announcement effect and the prevalence of foreign countries differ. Second, additional directional plan announcement, major shareholders involved in the subscription of the private placement have a more significant market reaction, and the market reaction is negative, indicating when the controlling shareholders and the shareholders to participate in private placement of new shares when the market passed the one on the positive signal of listed companies, listed companies will have a better short-term stock price performance. Third, additional directional case. Orientation of institutional investors to subscribe for additional participation in a more significant market reaction, and the market reaction is negative after the first show-cash assets of financial institutions willing to participate in orientation, and to withstand 10 months of the issuance of additional shares of lock instructions listed companies in the directional After the issuance to have more liquidity to its own dictates, has a strong development capability, to the market sends a positive signal. Fourth, although our private placement announcement effect is negative, there is a certain stock price has been suppressed by the situation, but there are major shareholders and institutional investors to participate in the orientation of additional shares of its suppression is not obvious.Chapter VI for the relevant proposal. In order to make capital markets more standardized, this paper directed to make the following additional policy recommendations. First, the relevant departments should actively promote the conditions listed companies issuing new shares through the directed acquisition of the controlling shareholder and its shareholders, the assets associated with the holding. Second, the directional mode of issuance of the subscription priority should be given priority in order to subscribe for cash assets the way, followed by non-cash assets to consider the subscription approach. Third, in order to subscribe for non-cash assets into the asset quality of the above methods require the overall size of assets, must reach a certain size,The non-cash assets should be placed in a continuous profitability, can be a complete independent accounting business assets. Fourth, further tighten the determination of the pricing reference date and to consider extending the pricing reference time intervals to ensure that private placement pricing of fairness.