A Study On Market Timing In The Private Placements Of Listed Company In China

As the government implemented Equity division reform in 2006,private placement became a new kind of refunding in full circulation times.Because of small risk,low cost,fast financing,etc,private placement got the favor of the listed companies soon and became the the main refinancing tools.But the study found that the domestic private financing in recent years data,listed companies are not keen to private purchase at any time.The scale of private placement increases rapidly in a period of time,rapid declines in another time.What factors affect the listed companies'consideration on the timing of the decision,and how they influence?Based on the combination of case analysis and general rules,the paper hopes to give a certain explanation to the above problems.First of all,the paper briefly introduces the results of study about equity refinancing and private placement.Then through research on relevant contents of private placement analysis of the problems in the securities market,the paper tries to find out the system characteristics and market characteristics of private placement in our country.On the basis of Market Timing Theory and the domestic situation,the paper tries to find out the listed companies' considerations on the time of private placement by two specific cases.The paper draws the conclusion:(1)In response to the industry development and the change of market demand,companies need to adjust management strategy,and the production plan.Based on the need of funds,listed companies often choose private placement,so the market is often a main factor when considering the time of issuing.(2)Big shareholders often choose the timing of the private placement according to the market and the errors of stock valuation to obtain immediate benefits or the potential benefits of the future.(3)Government regulation can control listed companies financing costs and benefits,so Listed companies like to implement private placement when the government chooses deregulation.Finally,the paper gives some suggestion from the position of government.