A Study On Refinancing Effects With Different Objects

In China, the refinancing mode includes public offering and private placement, and they are different in offering objects. Before first half of 2006, the refinancing mode is mainly public offering, the amount of public offering is more than that of allotment of shares from 2002. The amount of private placement is beyond public offering from 2006, and private placement becomes the main mode of equity refinancing.In this paper, event day is selected as the first notice day, which refers to the earliest date of refinancing announcement, not the date of the board announcement or the resolution of shareholders meeting. This paper uses event-study analysis to study announcement effects of public offering and private placement with this event day. We also study short-term market performances within one year and long-term market performances one year later, which fills up blank of related research fields. This paper not only studies a single event window but also compares different event windows to regress cumulative average abnormal returns of private placement.This paper gets following conclusions: Performance of private placement outperforms that of public offering in short term; Both public offering and private placement can bring positive cumulative average abnormal returns in long run, and the longer inspection cycle is, the greater cumulative average abnormal returns are; The factors of cumulative average abnormal returns of private placement takes into effect only in certain event windows, the longer the event windows is selected, the smaller the impacts are, and the less significance is.The paper is divided into four parts and five chapters as follows:The first part is Chapter I, which is an introduction section. It analyzes A share market environment, the theoretical and practical research significance, literature review, and the framework and innovation.The second part is Chapter II, it carries on a theoretical analysis of refinancing of listed companies. This chapter generalizes the development stage of refinancing mode and characteristics of each stage. In this part, we compare public offering with private placement and point out the research way.The third part is main part of this paper and includes two chapters, Chapter III and Chapter IV. Chapter III analyzes the public offering and private placement's short-term announcement effect before and after the first announcement, and carries on comparative study on short-term market performance of public offering and private placement within one year after the implementation and long-term market performance one year later after the implementation.Chapter IV is the internal research on the object's differentiation of private placement. This chapter carries on the regression analysis on influencing factors of private placement's cumulative abnormal returns with two different event windows. The chapter also studies on three different release objects of private placement.The last part is also the last chapter. Chapter V presents conclusions and policy recommendations. This chapter summarizes results and puts forward relevant policy suggestions in the refinancing process.