Research On The Risk And Prevention Of Equity Pledge Business Of China Securities Co.,Ltd

With the phenomenon of equity pledge becoming more and more common in the stock market in China,the controlling shareholders of listed companies that mainly participate in equity pledge have excellent financing channels.So far,China Securities Co.,Ltd has accepted 182 equity pledges in 2019,with a market value of about 16.606 billion yuan.In 2018,107 equity pledges were accepted,with more than 2 billion shares pledged,and the total pledged market value was 6.962 billion yuan.The total amount of pledge is in the forefront of the brokerage industry.The overall equity pledge business of China Securities Co.,Ltd performs well.Under the background that the financing method of equity pledge is encouraged by the market environment,the competition among securities companies for the market share of equity pledge is in full force.The month has rain or shine round,the market will not do well all the time.Securities companies in the equity pledge business profits at the same time,will also face loses.This paper makes a qualitative and quantitative analysis of the current situation of equity pledge business of China Securities Co.,Ltd and the market risk,credit risk and moral hazard it faces,so as to have a comprehensive understanding of equity pledge.The share price of China Securities Co.,Ltd fell nearly 10 percent in the three days after the announcement.At the same time,the 23 key listed enterprises that were repeatedly pledged by China Securities Co.,Ltd in 2018 and 2019 have market risks,among which,the equity pledge business with botian environment,baiyin nonferrous metals and lisichen has greater market risks.The equity pledge business of China Securities Co.,Ltd is facing credit risk,and its pledge business with quantong education and botian environment has serious credit risk.The value of Altman’s z-score of these two enterprises is lower than 2.675.There are problems in the enterprise’s operation and the possibility of default in the equity pledge transaction.Finally,the author gives the specific risk prevention measures.