The Empirical Study Of Short-Term Price Effect Of Private Placement To The Listed Company

Since the release of Reform of Non-Tradable Shares Policy by China Securities Regulatory Commission in 2006,the private placement has become a main mode of equity refinancing given to its advantages in cost-saving and relatively simple issuing procedures.However,the rapid development of private placement in China has also given rise to some market disorders and investors' interest losses,arousing the interests of both the scholars and the professionals in this area.This paper is an empirical study focusing on the short-term price effect of private placement announcements.Based on the data of 794 listed companies which released private placement announcements in 2016 in Shanghai and Shenzhen A share market,we will mainly use the event study method to analyze the market short-term reaction to the private placement announcements.Furthermore,in order to ensure the data accuracy,we selected 488 effective enterprise samples after deleting those companies which released more than once private placement announcements in a year or implemented excessive trading halts during the event window or estimation window.Besides,we have also studied three factors that may exert influence on the private placement market effect,including the discount factor,the shareholder participating factor and the enterprise property factor.After data processing and hypothesis tests,we come to the following conclusions.The Chinese stock market is in accordance with semi-strong market hypothesis with no information leakage in advance;the private placement price effect on the market turns out to be positive and significant;considering that 421 out of the total 488 listed companies chose to issue at a discount when refinancing with private placement,accounting for 86.27%of the sample,we can conclude that issuing at a discount is a more preferred refinancing mode for the listed companies;the discount factor and the enterprise factor actually have significant influence on the price effect of private placement,while the shareholder participating factor does not show significant effect.