Large Shareholders' Equity Pledge And Market Value Management

After the financial innovation the stock pledged repo which conducted by Shanghai and Shenzhen stock exchange in 2013,the listed companies' equity pledge behavior has become more and more common,According to the database of wind,during 2016,the number of listed companies which had taken participate in the stock pledge were as many as 1,600,more than half of the number of Chinese A stock market listed companies,and some listed companies had taken participate in the equity pledge behavior more than once.For example,in 2016,the company who most often participated in the equity pledged financing was Shanghai Lai Shi(002252.sz),and its times of participated in the equity pledged financing was 87,almost 7 times every month.According to my calculations,during 2016,the average times of the company whose times of equity pledge were first ten were 52.3.What kind of influence it will be on the market value management of the listed companies when So frequent pledge Act happened at the same time?Based on the above question,in this paper,we will choose the listed companies which had taken part in the equity pledge from 2010 to the first quarter of 2016 to analysis the relationship of the stock pledge and the market value management.And we found that: 1,the controlling shareholder's equity pledge behavior is conducive to strengthening the market value of listed companies' management,However,frequent equity pledge behavior will weaken the market value of management;2,When the controlling shareholder and minority shareholders take part in the equity pledge at the same time,the companies' behavior of the market value management will be significantly stronger than there is only the controlling shareholder take part in the equity pledge;3,When the controlling shareholder of different enterprise attributes taken part in the equity pledge,their management of the market value will be also significantly different,that is when the controlling shareholder of private enterprises was in equity pledge,the private listed companies will have a more obvious market value management behavior.Finally,according to the conclusions of this paper,we put forward the relevant policy suggestions to prevent the risk of equity pledge and strengthen the market value management.