A Research On The Long-term Market Performance Of The Assets-injecting Of The Private Placements

Currently the private placements have quickly exceeded the allotment and publicly placements of new shares become to an important means on the refinance market of listed companies,and the assets-injecting is one of the most important species of the private placements.Along with the arrival of full circulation of share,major shareholders and tradable shareholders are consistent,the wealth of the major shareholders are decided by the wealth value of the stock held.Based on the wealth effect,major shareholders have power to make high quality assets securitization by assets-injecting to make listed companies larger and stronger.Empirical studies have shown that there might be phenomenon controlling shareholders through private placements of new shares inject low-quality assets to do the listed company predatory,or inflate the value of the assets to transfer the benefits.So how the assets-injecting of the private placements associated with transactions of the double impact on the performance of listed companies is a problem worthing exploring in depth.Purpose of this research is to sure the major shareholders of the implementation of this act in the end is to obtain private benefits of control or really develop company.This paper uses method of combining normative research and empirical research and selects105companies which have successfully implemented into the class of asset placement from January1,2006to August31,2009in shanghai and Shenzhen A shares as the study sample. This paper is based on asymmetric information theory, agency theory, transaction costs and asset specificity theory and the tunneling and "support" theory, and made five corresponding assumptions. Then based on the theoretical analysis and research assumptions, build a multiple regression model. After that, we use software such as EXCEL,SPSS and EVIEWS to do data processing,using even study method to research the market performance (the stock price effect)of the sample companies for two years after the private placement of assets,to test whether the assets'quality they inject is high or the asset pricing is reasonable.This paper uses the industy adjusted by holding excess return, calculated using the rate of return on stocks, as an alternative empirical test variables of the market performance.Meantime,take into account the changes in ownership concentration,the degree of solving related-party transactions and other factors affecting performance on the market.Taking into account the robustness of the results,this paper intends to use CAR,net capital gains rate,etc. to replace the BHAR to do the empirical test of the model.Finally,combination of empirical results and the background of our system,this paper give policy advices on corporate governance,securities regulation and information disclosure.The empirical results show as follows:firstly, the BHAR24months after placement is positive, indicating the placement of assets shows a good long-term market performance. Secondly, the placement with related assets hold excess return significantly better than non-related assets.Thirdly, there is a significantly positive correlation between the BHAR and the objects of placement whether only include major shareholders. That is to say,the private placements'long-term market performance with objects only including major shareholders is significantly better than objects involving other parties.Forthly, there is a significantly positive correlation between the BHAR and the change of ownership percentage of the ultimate controller's, indicating that the increase in ownership concentration of private placements of assets will increase the BHAR and enhance the company's stock price resulting a good performance of the market.Fifth,the correlation between is the long-term market performance in private placements of assets and the settlement degree of related party transactions negative but not obvious.