Research On Announcement Effect Of Private Placement In Different Events Dav And Different State Of Market

Recently,the far-reaching shareholder structure reform has completed,and China Securities Regulatory Commission launched the "Administrative Measures for the Issuance of Securities by Listed Companies" and "Implementing Regulations for the Non-public offerings by Listed companies ".Under this particular institutional background, the directed add-issuance has gradually become mainstream for equity financing.,taking the place of traditional public issuance. Owe to its low threhold and convenient procedures, directed add-issurance takes great attention of the supervision institution and is chose by more and more listed companies.The announcement and inplamentation of the directed add-issuance directly influence the stock price.More importantly,they determine the the stock market resource allocation and redistribution of wealth.Just because of the above-mentioned reasons,not only the supervision and investors attach great attention to it,numerous researchers take great interest in this field.Researchers at home and abroad focus on these following studies including the effect on the short-term stock price and its influencing factors, pricing for the add-issuance and the long-term accounting performance. Researchers generally take the process of the directed add-issuance as a whole, and seldom note whether there is any difference between announcement effect on public offering announcement date of the Directors’ Board Meeting and that on public offering announcement date of the shareholder’s meeting. Even if they have noticed that,they just do some simple compansions.Then,which information hided in the directed add-issuance could affect the share price? And how that information affect it,actively or passively? In the peace of time for the announcement,what role do the listed companies and investors play? Does their decisions affect the stock price or changes in the stock price affect their decision-making? Does the announcement of the directed add-issuance have the same effect either under different market trends? This paper is set to answer those above questions.We use excess rate of return to measure the impact of the announcement information on stock prices. The amount of excess rate of return is equal to the actual rate of return of the stock minus the expected rate of return of the stock. We take the market adjusted return model to estimate expected rate of return.We take event study to research the issuance of the stock price effect of China’s listed companies plan announcement date and the private placement process. Whether there are significant excess returns before and after to verify the different announcement,and analyzed and the stock price effect of two different announcements. Different state of the market announcement effect of the same type of announcement of the sucked samples divided into bull and bear state sample, and divided into test whether there are significant excess returns, and compare and analyze the differences in the state of the market.First we introduces the background to the study and research, and gave a brief introduction of the additional institutional change and the current implementation of the private placement process, Then summary of the domestic and international research literature on the effect of the additional stock. We selects the plan announcement date and the issuance of the announcement date as event date, and selected on the basis of the20trading days prior to the announcement to the first20trading days after the announcement of a total of41trading days, Study of each trading day abnormal return and cumulative abnormal return. We also examined the three types of time window, including expanding the time window:T[-1,1]、 T[-3,3]、T[-5,5]、T[-10,10]、T[-15,15]、T[-20,20]; forward time window:T[-20,-10]、 T[-15,-5]、T[-20,0]、T[-15,0]、T[-10,0]、T[-5,0]、T[-3,0]; backward time window:T[0,3]、 T[0,5]、T[0,10]、T[0,15]、T[0,20]、T[5,15]、T[10,20].This article studies the following conclusions:1. There are significant positive stock price effect on plan announcement date and the issuance announcement day. Which the different state of the market in bull and bear markets, The plan announcement day average excess return is1.1997%,0.9353%, respectively; Corresponding to the issuance announcement day average excess return is0.8531%,0.7190%, respectively. And all are significantly positive at the1%confidence level.2. Before plan announcement and the issuance of notice, Cumulative abnormal yield curve showed an upward trend. Both listed companies to choose the machine choose pricing window and to maintain its share price, also news leaked in advance. Cumulative excess rate of return in a few days ago after the issuance of Notice, huge fluctuations. The main reason is some investors to be informed in advance of speculation within a short, and as well as the issuance of Notice as bad news. The absence of the phenomenon before and after the plan announcement. After the plan announcement, Cumulative abnormal return in the bear market status continues to rise, Listed companies to maintain its share price in order to maintain the attractiveness to potential investors. And in the bull market state,plan announcement as good news is accepted by the market.driven by investor sentiment to maintain the stock excess returns,company need to spend too much cost to maintain the stock price.3. In expanded time window, time window of the plan announcement date [-1,1],[-3,3][-5,5],[-10,10][-15,15][-20.20], Both the overall sample is divided into cattle, a sample of a bear market there are the1%level of confidence there is a significant positive cumulative average excess return. Issuance announcement day time window, whether it is significant sexual or cumulative excess return rate is smaller than the same environment as a benchmark to plan announcement window of time4.In Forward time window, plan announcement as the benchmark time window [-20,0],[-15,0],[-10,0],[-5,0][-3,0] regardless of the overall sample or the district is divided into cattlea sample of a bear market is significantly positive at the1%confidence level. Issuance of notice to the baseline time window [-20,0],[-15,0],[-10,0],[-5.0],[-3,0] in terms of the overall sample, or cow, a bear marketsamples were in the1%confidence level is significantly positive.5. In backward time window, plan announcement as the benchmark window of time, there is a big difference in samples of bull market and bear market sample. The announcement of additional baseline time window, whether it is a significant excess returns do not exist in the overall bull market or bear market sample.Based on these results,we presents3policy recommendations:First, the Government and regulatory bodies should actively support the listed companies in the implementation of private placement; Second, to further improve the internal the insiders registration system and information disclosure system and severely punish the disclosure of insider information and insider trading, to effectively protect the interests of medium and small investors; Third, investors should clearly recognize the significance of the announcement, careful to make investment decisions and avoid blindly follow the trend.The main innovation of this paper is:1. A more comprehensive study of private placement stock price effect, the previous studies mostly select the board of directors plans the announcement date as event date, and other announcement date less, less of issuance announcement day. We also plan the announcement date and the issuance announcement day stock price effect comparative analysis in previous studies2. Interests of listed companies demands from the private placement process point of view to explain the different event days and the different state of the market excess return differences, which in previous studies3. The same event sample divided into the status of the bull market and bear market state sample, more detailed and comprehensive analysis of stock price effect, and explain the excess returns in investor sentiment from the market.Though there are some inadequacies in this paper.1.Taking into account that there are a variety of factors that affect the stock price in the announcement of directed add-issuance based on different announcing date, in this paper,we just focus on the mechanism for issuing, the interests of listed companies and the sentiment of investors.The conclusion might be biased.2.Being subject to the length of the paper,we did not test various hypothesis on the directed add-issuance.