The Research On The Announcement Effect Of Listed Company’s Convertible Bonds In China

With the completion of the reform of the equity division, our security market hasfurther improved. The security market has come to be the main channel for thecorporate finance. The convertible bond, as one financing instruments, is developingfast although it has not existed for a lone time. Compared to the numerous literaturesand results of the empirical research conducted abroad, our research on the effects ofthe convertible bond issuance is few. This is the signification of this research.At first, the article summarized several theories about the market reaction to therefinancing which had been brought up by scholars abroad. Then, in the empiricalresearch, we use92listed companies which have issued convertible bonds from April2001to April2011as our samples. We analyze the stock price fluctuation around theday of announcing convertible bond prospectus using the standard event study method.The results show that the average abnormal return （AAR） of the event day isnegative significantly.In the regression models, on the basis of foreign research and also consideringthe practical conditions of Chinese market, we bring forward the model contain theabnormal return of the event day as the dependent, the corporate information asindependents including financial leverage, issue scale, company size, earnings pershare, etc. At last, the deficiency of Chinese market of convertible bonds is analyzed,and the corresponding tactics is given.