China A-share Market Of Additional Empirical Studies Of Announcement Effects

Since the Seasoned Equity Offering (SEO) was adopted in 1998, the SEO has been rapidly developed as one of the most important refinancing methods on A-Share market. However, the stock price in secondary market often falls with SEO announcement, which has brought with severe losses to stock investors. This kind of phenomenon is called as the Announcement Effect or even "SEO Landmine".A Lot of western scholars have implemented comprehensive researches for the announcement effect, and made extensive analysis by some theories such as the Price-pressure Hypothesis, Information Hypothesis, Financial Preference Hypothesis, etc. As SEO has been recently introduced to the A-share market, there is still no adequate research focused on SEO in China. With the fast development of SEO in our country, it has become increasingly important for us to exert in-depth study, especially more empirical research to SEO in China.Based on the data of 144 listed companies which have implemented SEO since 1999 on A-Share market, this paper has adopted the Event-Study and Regression method to analyze the announcement effect in China in an effort to find out the main reasons responsible for the excess earnings. In the process of calculating excess earnings, this paper has chosen Board of Directors (BOD) Announcement Day (AD), Shareholders Announcement Day, CSRC Verification Day, SEO Announcement Day, Listing Announcement Day, and the Date of Going Public as the check points to evaluate the announcement effect. As for the regression analysis, this paper chooses the Board of Directors Announcement Day and SEO Announcement Day as study event, and tries to find out the significant explaining variables for announcement effect in order to provide relative reference for stock investors.This paper's empirical analysis indicates that the announcement effect also exists on A-Share Market, and the effect of certain date is different with each other. Meanwhile this paper analyzed the influences that different factors such as Shareholding Structure, PE Value, Assets-liabilities Ratio, etc have on the announcing effect, and has given relative explanations to regression results. In the end, this paper puts forward some suggestions to improve China's SEO market.