Listed Companies Special Treatment Of The Announcement Of The Market Reaction

The delisting mechanism of listed companies is of importance to ensuring the operation of securities markets in good order. Since the Chinese stock market is still an emerging market at early time, delisting is still a costly experience for listed companies and investors. Under the situation, the stock exchanges began to implement the "ST' policy to those distressed listed companies. The sign is designed to convey signals concerning the value and risk of its common shares.As the development of securities market, the ST system experienced changing and reforming. Investigating the information content of ST announcement, it is the suggestion about how to perfect special quitting market system in domestic stock market, which has important theoretical value and realistic meaning.Based on the summing-up of reference papers at home and abroad, we put forward the basic assumptions and built up a research model. The research sample is from the ST cases from 2002 to 2005 in China security market. Using the event study and regression analysis method, we analyzed the short-term market react, long-term performance and the variables affecting the stock price performance for ST companies.The paper reaches some conclusions as follows: Similar to earlier studies, the research shows that stock market makes evidently negative response over short periods to the announcement. The key findings of this book are summarized as follows: There are differences between the returns behavior of *ST and ST stocks in long-term analyse. The annual study shows the strong negative response year by year and the price reactions to announcements of ST are related to the institution movement. The announcement of the removal of "ST" increased the stock value significantly.In addition, we find the following factors have the remarkable effect for the stock performance. Probability of ST is used as a proxy for ST outcome, and empirical evidence indicates that ST announcement convey important unanticipated information to the market. What's more, whether the company withdraw from special treatment has a significant influence on their stock prices during ST announcement.At the end of this article, several policy proposals are put forward according to the empirical study conclusion.