Research Of The Market Reaction On Private Placement Of New Shares Listed Companies-based On Chinese Different Market Cycle

With the vigorous development of China’s capital market,private placement ofequity shares has become a mainstream way of refinancing of the listed companies,highly pro-gazed. Research scholars from foreign and domestic is also in-depth studyabout the private placement. However, as an important factor in the stock market,market cycle will have some impact on investors’ behavior, resulting in the privateplacement market reactions vary under different market situation.In this paper, I choose all of the A-share listed companies in China’s securitiesmarket that declared and successfully implemented private placement of new sharesas samples during early July2006to the end of December2012to study the marketreaction under different market cycle by the use of event study method. Firstly, we’llmake a judge ment on the sample period according to the pre-determined criteria, andthen make a comparative analysis about the private placement market reaction fromthe point of overall sample and the classification.Conclusions showed that there will exist a significant positive effect to China’sstock market on the private placement announcement on the day of the announcementunder the overall situation.In this regard, I will use the theory of behavioral finance toexplain the phenomenon then make a conclusion and summarize some relevantinspirations.