The Influence Of Institutional Investors Shareholding On Stock Issuing Behavior

Recently, mutual funds have been a powerful investment force in security market due to their fast development, and attract lots of researchers’and investors’ attention. As one of the professional investment institutions, can mutual funds affect companies making significant decisions? For example, whether mutual funds can impact SEO (seasoned equity offering)? If they can, what are the influences? Exist researches in China have explored the impact on issuing scale and issuing price in directional seasoned offering of institutional investors. Few of them analyze the influence on the whole process in SEO of institutional investors including the behavior before and after SEO. According to this phenomenon, this paper will study the influence on SEO of institutional investors’shareholdings from stock issuing intention, stock issuing scale, stock issuing price, stock issuing completion, announcement period returns and corporate performance after stock issuance with all the public issuing sample and directional additional sample from the beginning of 2006 to the end of 2013 in the Shanghai and Shenzhen A-share markets.The content of this paper is as follows:Firstly, this paper shows the rapid development of institutional investors, and further summarizes the research about the influence on SEO of institutional investors, pointing out the deficiencies of the existing study, and expounds research ideas and methods in this paper.Besides, this paper explains the presence of institutional investors can alleviate the principal-agent problem between shareholders and managers, and gives some simple examples that mutual funds can ease principal-agent problem of the company through active supervision to show that institutional investors such as mutual funds can affect SEO.Lastly, this paper puts forward the fund shareholding ratio has relationship with stock issuing intention, stock issuing scale, stock issuing price, stock issuing completion, announcement period returns and performance after stock issuing according to the market timing theory and principal-agent theory, and give an empirical analysis to verify it.The results show that:the proportion of funds shareholding is larger, the intention of SEO is stronger; the proportion of funds shareholding is larger, the issuing scale is smaller; the proportion of funds shareholding is larger, the issuing price is higher; the proportion of funds shareholding is larger, the completion of issuing is more possible; the proportion of funds shareholding is larger, the performance after stock issuance is better. However, the influence of funds shareholding on announcement period returns is not significant.