Research On The Affecting Factors Of Liquidity In NEEQ Under Market Maker System

NEEQ is our country’s important national OTC market. According to the experience of the developed capital market, the OTC market has great significance to a country’s capital market construction. On the one hand, the OTC market provide financing channels for a large number of sensitive and dynamic medium-sized enterprises, and these enterprises is the key to promote national industrial structure upgrading and innovation of science and technology; on the other hand, OTC increases the exit channels of venture capital, greatly reducing the venture capital’s exit time, which will attract more capital into the field of science and technology innovation area. From the beginning of the NEEQ expansion in 2013, NEEQ has attracted attention to the market, in August 25,2014, NEEQ began to implement the market maker trading system. Loose listing system attracted a large number of small and medium enterprises, but the low liquidity has always been a problem of market.Liquidity, stability, transparency and effectiveness are the four major goals of the securities market, and liquidity is the most important thing.it is the cornerstone of the financial market and lifeline. For regulators, a stable, high liquidity market can increase the confidence of investors, maintain the stability of the whole financial market; for investors, high liquidity of the market also means lower transaction costs; for listed companies, stock liquidity for investors to trade, can establish a better image, if a market is lack of liquidity, then the market will lose the existence necessity. Amihud (1988) pointed out:"the market liquidity is everything".Around these two issues, I will analyze the development NEEQ right now, and analyze the market size, the geographical distribution of the industry, turnover and the composition of investors. On this basis, this paper focuses on the analysis of NEEQ market maker system, the main OTC market maker system for comparative analysis, to explore the difference between the OTC market maker system. At the same time, this paper will combine the domestic and overseas scholars have put forward the definition of liquidity, liquidity measurement method, determine reasonable indicators to measure the liquidity of the new three panel makers trade stocks, from the stock market trading of screened market since the transaction more days of stock and 102 samples were picked out and compare the stock market making sample and gem and small and medium-sized panels of the sample stocks and find NEEQ trading stock liquidity is about one tenth of the Growth Enterprise MarketFollowed by a review of the literature related to securities market liquidity factors, combined with the existing research, using panel data regression model, stock doing the empirical analysis of NEEQ, this paper focuses on the analysis of the effect of stock price, market, number of market makers, floating capital scale, top ten shareholders of shareholding ratio, earnings per share of sample stock liquidity.Get the following conclusions:six factors on stock exchange rate has a significant effect:(1) the sample stock’s liquidity and price are in positive correlation;(2) the sample stock market liquidity and market is related; (3) sample stock liquidity and market makers’number negatively correlated; (4) the sample stock liquidity and capital flow scale negatively correlated; (5) the stock liquidity and the top ten shareholders equity ratio are negatively correlated; (6) the sample stock liquidity and earnings per share are negatively correlated.After that, the paper makes a concrete analysis of the five conclusions:(1) liquidity and price showed a significant positive correlation. This shows that when prices rise, the wealth effect of pushing investors to trade, so as to increase the turnover rate;(2) the expansion of the size of the tradable share capital of three new board to reduce the liquidity of the market making trading.(3) the proportion of the ten major shareholders and market making stock liquidity is negatively correlated, which is consistent with the previous hypothesis.(4) the number of liquidity and market makers is negatively correlated. Theoretically, number of market makers increase should increase liquidity, increase turnover, but in the NEEQ, the increase of market makers’number has negative influence for liquidity(6) the turnover rate and earnings per share are negative correlation.In a word, this paper put forward opinions on the construction of the NEEQ market maker system from the perspective of regulators, listed companies and market makers angle. Proposals include the following three aspects:The regulators should be to expand the scope of market makers, breaking the monopoly of the existing market maker, and let the market maker to play a role; listed companies should improve the operational capabilities of the capital market. Reasonable arrangement of equity structure and the types of stockholders can make the capital market to help enterprises to develop; for the market makers, they should determine the reasonable profit model, rely on the spread gain stable profits will be a permanent solution.