Research On The Issues Of Market Timing By Controlling Shareholders In The Private Placements

Listed companies in China have obvious equity preferences when refinance.Since the establishment of private placements,it has quickly become the primary choice for the listed companies in refinancing.With the high fever for the private placements in capital market,over-financing,frequent issuance,tunneling and other issues emerged,private placements have already changed,from a simple refinancing means to the path of capital operation for controlling shareholders of listed companies.Based on the Market Timing theory and combined the Stock issue system,this paper studies the behaviors in private placements of controlling shareholders of listed companies scientifically at the views of market timing and government regulation timing.Focusing on the A-share listed companies completed private placement from 2010 to 2016 in Shanghai and Shenzhen Stock Exchange,this paper analyzes the impact of market timing and government regulation timing on the controlling shareholders' behaviors in the private placements through Logistic regression on the basis of theoretical analysis.And the sample is further separated to test the behavior of the controlling shareholders under different market conditions to compare the impact of the market timing and government regulation timing on controlling shareholders.The study found that the behaviors of the controlling shareholders in private placements is based on the judgment of the market timing and government regulation timing.The market timing is more influential than that of the government.By using the pricing discount rate as the tunneling agent variable,the empirical result shows that the market timing and the government regulation timing has a material impacts on the pricing discount rate.Controlling shareholders can effectively grasp and use this opportunity to tunnel.The way of asset subscription is due to its special double "correlation",which can effectively make up the shortage of market timing.The conclusion of this paper is that the controlling shareholder's behaviors in private placements are affected by the market timing and the government regulation timing.The market timing is the basis for the controlling shareholders to consider the behaviors in private placements.The controlling shareholders tunnel and delivery interests by the corresponding timing behaviors,which eventually damage the interests of small shareholders.