Analysis And Solution Of Stock Pledge Risk In China Stock Market

In recent years,the business of pledge of equity in China has developed rapidly,and its advantages such as low financing cost,high financing efficiency and wide range of capital use are favored by more and more investors,which have great development potential.At the same time,the associated risk problem also follows,to the detriment of investors.Since 2018,influenced by the downward trend of the a-share market,the risk degree of the share pledge repurchase agreement business has also increased correspondingly.Especially,the pledge of A high proportion of shares will not only trigger the repayment risk of the pledge,but also greatly aggravate the risk of the minority shareholders and listed enterprises.Therefore,the supervision department of capital market attaches great importance to controlling the risk of equity pledge in order to maintain the stability of domestic financial market.Under this background,based on the analysis of the current situation of the equity pledge business in China’s stock market,this paper explores the risks caused by the equity pledge business and proposes targeted prevention and control strategies based on the analysis of the causes of the risks,so as to ensure the stable operation of China’s stock market and prevent the occurrence of systemic risks.Firstly,this paper analyzes the current situation of equity pledge in the domestic stock market,expounds the development process of equity pledge from the perspective of scale,system and trend,and then makes a comparative analysis to understand the main risk bearers.Based on the analysis of the risks faced by each subject of equity pledge,the potential risks of equity pledge business are explored.Secondly,this paper uses the Multi-factor model to quantitatively evaluate the underlying stock collateral rate according to the value,growth,liquidity and volatility of the stock,and determines the pledge police line of the stock on the premise of considering the market risk through the VaR method.Then,from the perspective of credit position,target management and default probability,a series of evaluation indexes are proposed to analyze the risk of simulated business.Last,according to the research results,a solution to the problem of equity pledge risk in China’s stock market is designed.One is to defuse risks,the other is to prevent risks.At the same time,the paper makes a multidimensional analysis of the applicability and feasibility of the solution.In conclusion,the solution proposed in this paper still has some shortcomings and still has many problems,but it provides a reference for dealing with the risk of equity pledge in China’s stock market.