Study On The Influence Of Stock Performance Following The Private Placement In Chinese A Share Listed Company

Changes have taken place in the basic pattern of the domestic stock market since the new‘Securities Law’ and the full circulation shares after the share reform. The private placementhas been the best choice to capital demanders because of its low cost and covenant lite.Theamount of private placement is increasing year after year,and among all the sectors whoinvolved in private placement,the Financial Sector、Manufacturing and the Real Estateindustry are the top three.The research target change from the industry-wide to a singleindustry for further study as the scale become larger and larger in recent year, it turn out to behave a better understanding of the actual market reaction of directional issuance,identificationeffect,guiding role,test the market response and whether it is worth for the general class ofreal estate capital demanders promotion to follow.The meaning of the study of the capitalreaction is related to not only the stability of the real estate market but also to the long-termdevelopment of the real estate industry.The research would be added to the blank in therelavant field, providing decision-making references for Chinese securities market managersand the listed real estate companies that have plans to issue private placements.The data is choose from the real estate listed companies samples from2006to2010inShanghai and Shenzhen stock market who have take the directional seasoned offering. TheEvent Study and the buy-hold abnormal returns are used to analyzed the short term effect andlong term effect.Divided the research into two aspects the short term and long term, select42listed companies as samples.As for the short term, the event window is30days before andafter the announcement of the directional seasoned offering and the research method iscombine the event study with multivariate regression method;as for the long term, take monthyields for36months after examination index as indicators,adopt event study with the methodof buy-hold abnormal returns.During the research, qualitative analysis is first concernedaccording to the impact on the real estate company’s share price, then for the further study thegoal is to find out the internal factors which affect the stock prices of the real estate company.Research shows that:（1）In the short term, the purchase of stock price impact is positive, the purchase in the short term will have positive effect on real estate company shares, which matchs the companyquality hypothesis and entrenchment effect;（2）In the long term, the accumulated36months abnormal returns after the privateplacement is significantly positive, which consider long-term can also produce positive effecton the certain companies, stock price influence mainly depends on their financial indicators.In conclusion, in the near future with government policy tightening and smaller Banks’capital supply,the real estate industry can be shifted into private placement as the effectivemeans of financing.