Ultra Raised The Status Quo Of China's Listed Companies Issuing New Shares And Countermeasures

From June 2009 to Dec.31st 2010, there were 469 companies having raised funds in the A-Share market. IPO during this period showed a lot of anomalies:high issue price, high price-earnings ratio and ultra raised. During the study period, the average price-earnings ratio of listed companies is more than 58 times, ultra funds up to 267.787 billion Yuan. How to make a reasonable use of the huge ultra-raised funds has become a hot topic nowadays. Most of the companies having disclosed the use of ultra-raised funds plan to use them for real estate, business expansion, asset replacement, or even directly deposit the funds in banks to earn interest. The efficiency of the use of ultra-raised funds is very low, which is obviously not in line with market functions of optimized allocation of resources.For the ultra-raised issue of listed companies, this paper uses the companies having issued new shares in June 2009-December 2010 as samples and analyses the altra-raised problem mainly in term of high ultra-raised ratio and price-earnings ratio. The results suggest that ultra-raised issue involves a series of adverse effects, including:wasting the social resources and causing the loss of company's human resources which is against the development of listed companies and harms the interests of investors. Then, this article studies the causes of the ultra-raised from the following aspects:the issue system, market prospects, issuers, sponsors and investors. Subsequently, the paper discusses the proper way to solve ultra-raised problems and the rational way to use the funds. This paper argues that in order to solve the ultra-raised problem, we must improve the new issue mechanism as well as the corporate governance of listed companies, cut off the sponsor's distribution of benefits from over raised funds and enhance investor education.