The Decision-making And Effectiveness Research Of Private Placement Of Listing Securities In China

Since The regulations for the security issuance of public companies was published and imposed on May 8th 2006, private placement, as an upstart of refinancing market, expands rapidly and gradually develops into the main extensive equity financing. Recent years, The Combination of CSR And CNR,One Belt And One Road and Asian Infrastructure Investment Bank offers a rapid develop chance for CSR, the leading railway transportation enterprise in China. Therefore, on basis of private placement refinancing conducted by CSR in 2011, the author will compare the decision-making of placement during an economic downturn and eventual effectiveness to analyze whether the private placement works.With the precedent of CSR private placement refinancing, the author analyze the decision-making of placement, options of refinancing timing and price, as well as Cahoots,Transfer of Benefits phenomenon undertaken by the shareholders and institutional investors during the financing progress. The author analyzes the short-term market reactions during the period when CSR conducts private placement, long-time returns, as well as the influence to CSR comparing the financial data between CSR in recent three years and the average figures of this industry, to observe the influence to company performances. Afterwards, the author draws to a conclusion that the private placement imposes a negative effect on the short-term performances, But also imposes a positive influence to long-time returns. However, private placement shows a variety of impacts on the financial data in the beginning period, its effect on management and development of a company will be demonstrated in a relatively long time. Finally, the author puts forward several proposals of counter plan regard to the issues raised in the private placement of public companies in China.