Research On The Impact Of China's Listing Corporation Stock Repurchase On The Performance Of The Company And Its Market Effect

Stock repurchase refers to the listed companies aim to adjusting the structure of equity or capital reduction through a variety of ways to repurchase the issuance of the stock from the capital market. It origins in the developed western countries one hundred years ago, especially since 1970s.For foreign mature securities market, stock repurchase is a common company wealth management and capital operation mode, which is conducive to optimizing the capital structure of the company, enhances the confidence of investors, increases the value of the company stock. But its development will be affected by a series of factors, such as macro policy, economic environment and legal environment.Compared with western developed countries, China's listing Corporation stock repurchase started late, the earliest stock repurchase occurred in 1992.There are few listing Corporation to repurchase stock due to the nature of China's capital market and legal restrictions before 2005. With the development of economy and policy, the case of listing Corporation stock repurchase is gradually increasing in our country. In 2013, the Securities Regulatory Commission and the State Council issued a series of laws, which gives more meaning and value to the stock repurchase in the capital market of our country. With the development of the stock repurchase, the scholars have gradually in-depth research on it.Based on the related literature and basic theory research about stock repurchase, I find that the existing research and theory agree that stock repurchase for the listed companies will optimize the capital structure of the company, enhance the value of the company, enhance the confidence of investors and enhance the price of the stock. However, under the background of China's current system environment, China's capital market and the western mature capital market still has a certain gap. Whether the stock repurchase can really improve the value of the company and produce the corresponding effect need to further study.Based on the background and development process of the stock repurchase system in China, the current situation of the development of stock repurchase in China is analyzed from three aspects of motivation, target and method. I find that the main motivation for the repurchase is to improve the stock price, and the trend is to concentrate on the auction repurchase of public shares. This paper studied the financial performance and market effect to explore the affections of the stock repurchase of China's listing Corporation through two cases about stock repurchase. I hope to have a more in-depth and detailed analysis of the listing Corporation stock repurchase in China, so as to put forward some suggestions for the characteristics of the current stage of China's stock repurchase. I also hope to help investors to know about stock repurchase rationally and promote development of the capital marketThe first part of this paper is the introduction. The research background, research significance, domestic and foreign scholars on the stock repurchase research status, the research ideas and methods of this paper, as well as the research methods and innovative points are stated.The second part is an overview of the theory of stock repurchase. The connotation, types and methods of stock repurchase and related theories are summarized briefly, aiming to provide theoretical basis for the analysis below.The third part is analysis of the present situation and listing Corporation stock repurchase in our country. On the basis of the background and the development process of the listing Corporation's stock repurchase in our country, the characteristics of the stock repurchase in our country are summed up.The fourth part is the typical case of listing Corporation stock repurchase. Based on Baosteel which aims to enhance the price of the stock and Loncin General which aims to enhance the value of the company, the effect of the different repurchase motivation of stock repurchase on the company's financial performance is studied. The results show that the listing Corporation stock repurchase in China has a special purpose in the development process, which is different from the western market. Not all stock repurchase can make listing Corporation performance better, different results are possible. From the market point of view, the stock repurchase with different motivations will cause a positive reaction to the market, indicating that investors are not rational enough to respond to the stock repurchase. But the degree of reaction time is different according to company's own situation, indicating that the market can identify companies operating results in a certain extent.Finally, according to the relevant conclusions, recommendations are raised to investors, listing Corporation and regulators. From the perspective of investors, investor education is need to improve their understanding of the stock repurchase. For listing Corporation, it is needed to strengthen the understanding and application of stock repurchase. For regulators, the regulations need to be completed to protect the benefit of small investors.The innovation of this paper is to select the most representative cases in the repurchase motive, object and the method. The two cases this paper selected are different in enhancing the value of the corporate with different motivations. And the positive effect of the market is short, which can't fundamentally improve the capital structure. Based on previous research on stock repurchases which is from the perspective of listed companies and capital market, this paper is from the perspective of the investors, hoping to give investors some references and regard stock repurchase rationally.