A Study On The Factors Affecting The Timing Of Orienteering In Different Market Conditions

With the development of market economy and capital market in China, the completion of the far-reaching shareholder structure reform and the launch of the “Administrative measures for the issuance of securities by listed companies ”and “implementing regulations for the non-public offerings by listed companies ” created a good environment for private placement-the method of listed companies refinancing. Owe to its low threshold and convenient procedures, private placement is gradually replacing public placement to become the mainstream of listed companies refinancing. Not only the supervision institution and listed companies take great attention of private placement, but also many of investors focus on it. What’s more, the research of it has become a hot topic in the researches on the listed companies’ equity financing behavior.Nowadays, the study on private placement focus on discount, announcement effect, benefit translation etc., which is based on the framework of traditional corporate finance theory and can’t fully explain the related phenomena of private placements in China. Market timing theory is mainly applied to enterprises IPO, public rights, etc. There is relatively little application in private placement. Based on the characteristics of Chinese stock market, this paper explores the market timing theory to examine listed companies’ private placements in China. Through getting to know the system and situation of private placement in China, use market timing to explain the market timing behavior of private placement in the background of different market states in order to enrich the study on market timing selection in private placement.This paper firstly uses nonparametric diagnosis theory to divide the market status from the completion of the far-reaching shareholder structure reform to 2015 in the background of emerging capital market and the characteristics of economic development in China. Then, analyze the characteristics of market timing of private placement in the base of different market states; discuss the factors of carrying out or stopping the private placement. Finally, come up to suggestions.Using a sample of firms that completed or withdrew private placement in 2006 to 2015,this paper multi factor linear regression model to examine the impact of market timing on the withdrawal probabilities of private placement. The research shows that there are different market timing behaviors in different market states, and the factors affecting the behavior are also different. This paper provides a new perspective for researches on private placements, and at the same time enriches the application of market timing in Chinese capital market. This paper is of great importance to understand the financing activities of listed companies and to improve the regulation policies.