Analysis Of The Motivations And Market Effects Of Major Shareholder Increase

After the completion of the equity division reform,China's stock market has entered the era of full circulation,and the level of stock prices will directly affect the interests of major shareholders.As a result,major shareholders are motivated to take actions to influence the company's stock price,which is a way that large shareholders often use it.At the same time,the regulatory authorities gradually relaxed the restrictions on the increase in holdings by major shareholders.As a result,the phenomenon of increasing shareholder holdings became more common.So far,there have been four large-scale wave of increase in shareholder holdings.Some domestic scholars have studied the phenomenon of holdings of large shareholders.However,these studies mainly focus on empirical research based on large sample analysis.Few scholars analyze this phenomenon through specific case studies.This article uses the case study method to study the listed company's major shareholder increase shareholding issues,is conducive to a comprehensive understanding of the practical significance of major shareholders to increase shareholdings,for the regulatory authorities to improve the major shareholders of listed companies in China to increase the corresponding laws and regulations provide a realistic basis.Specifically,based on the theories of effective market theory,signal transmission theory,and control rights theory,this paper thoroughly analyzes the behaviors of Youngor's major shareholders in terms of timing,size of holdings,sources of funds,methods of holdings,and information disclosure.Based on this feature,and based on this,the main motives for this increase in holdings are sorted out.In empirical analysis:(1)Using event research method,measure the stock's short-term response to overweight events by measuring the stock's excess return rate from the first ten days of holding the announcement to the fifteenth day after the announcement of holding the holding;The excess return rate of the stocks on the 300 th day after the announcement of the increase in holdings measures the long-term reaction of the stock price to the increase in holdings;check whether the increase in holdings is based on the excess exchange rate of stocks from the 10 th day before the announcement of holdings to the 20 th day after the announcement of the holding of shares.There is information leakage and insider trading.(2)Wavelet analysis was used to study the fluctuation of Youngor's stock price from February 26,2014 to February 22,2017,a total of 938 trading days.The above-mentioned trading days of Youngor's rate of return sequence was used as a signal.Matlab 2016 was used to program the program,and wavelet analysis was used to decompose six levels.The mutation point of the yield series was analyzed and positioned to examine the influence of major shareholder holdings on stock price fluctuations.(3)From Jan.4,2011 to Dec.31,2015,Younger's daily volume data and daily yield data,establish a binary VAR model of trading volume and stock price volatility,and on this basis,check the volatility of trading volume and stock price.Granger causality.Empirical studies have found that:(1)In the short term,the increase in shareholdings of major shareholders has brought about significant positive excess returns;in the long-term,the increase in major shareholder holdings has no significant effect on stock prices,and the stock price movements mainly depend on the company's performance;In the first ten days of the announcement date,the excess turnover rate increased significantly,and the excess turnover rate dropped rapidly after two days of the announcement date.The news showing that the major shareholders increase their holdings was leaked in advance.Insider trading occurred.(2)The wavelet analysis detects that there are abrupt changes in the sequence of yields at the time when the major shareholders increase their holdings,resulting in singularities.This shows that the holdings of large shareholders increase the fluctuation of stock prices.(3)The Granger causality test found Granger causality from volume to volatility.The results show that when the transaction volume becomes larger,the stock price volatility will correspondingly increase.Based on the above research,this paper proposes the following policy recommendations for the specific situation of China's securities market:(1)Strengthen the supervision of insider trading in the process of increasing shareholder holdings,especially by using network information technology.And deal with abnormal transactions.(2)While encouraging large shareholders to increase their shareholdings,the regulatory authorities should play their role of supervision and guidance and prevent major shareholders from increasing their shareholdings and disrupting the market.(3)External investors should establish a correct investment philosophy and avoid blindly speculating on the “overweight” concept stocks.