Measurement And Prevention Of Liquidity Risk Of Major Shareholders’ Pledge Of Stock Rights

Equity pledge,refers to the shareholders in their hands of equity as collateral for financing a way,has been widely used.For major shareholders,equity pledge is mainly to expand financing channels,achieve leverage income,maintain control of the company and support the development of companies,etc.,of course,some major shareholders may also have the motivation of hollowing out.The massive outbreak of equity pledge began in 2014.With the impact of the central bank’s interest rate cut in 2015 and the bull market,the market value of equity pledge continued to rise from 2015 to 2017 and reached its peak at the beginning of 2018.With the stock market crashing and falling in the second half of 2018,the pledge risk is concentrated,so it is particularly important to prevent and dissolve the risk of equity pledge.Since 2018,the people’s bank of China,the state-owned assets supervision and administration commission,the banking insurance regulatory commission,the securities regulatory commission,and local governments have taken measures to defuse the risk of pledging stocks through asset management plans,bailout funds,and bailout bonds.The clean-up of risk over the past two years has also had a marked effect.Although influenced by COVID-19 and the global stock market,there were large fluctuations in the last two months,and the risk of short-term unwinding increased.However,compared with the overseas market,the a-share market in China is relatively stable.With the control of the epidemic and the launch of fiscal and monetary policies,stock prices are expected to slowly recover,with little impact on the risk of equity pledge.According to the data of China registration and settlement corporation,as of April 3,2020,the market value of pledged shares in China’s a-share market reached 4.3 trillion yuan,down 26.18%compared with the same period last year.The number of pledged companies was 2,991,and the number of pledged shares accounted for 8.22%of the total capital stock.In general,under the circumstances of intensified counter-cyclical regulation and relatively abundant and reasonable liquidity,the risk of equity pledge of listed companies is generally controllable and will not pose a systemic risk for a certain period of time.But for some large shareholders with high ratio and high frequency pledge,the risk still cannot be ignored.The pledge of equity with high proportion of major shareholders brings different degree of risk to the relevant subjects.For the pledgee,liquidity risk is the most important;Listed companies are mainly faced with the risk of control transfer,stock price fluctuation,capital liquidity risk and the risk of infringement of corporate interests.Major shareholders are mainly faced with the risk of losing control and asset losses.At present,liquidity risk is a very important risk in the market.The root cause of liquidity risk is the initial pricing error of the pledgee in the equity pledge transaction.Since 2019,the equity pledge of shenwan hongyuan,huarong securities and many other securities brokers has seen the "black swan"event of equity pledge.Many pledges broke below the level and could not be sold at the ideal price.Finally,the securities brokers had to collect these stocks and calculate and withdraw impairment losses.Therefore,this paper,mainly from the perspective of the pledgee,analyzes the liquidity risk of the pledgee in the process of equity pledge due to the stock price falling to the flat line and the stock cannot be sold successfully.Before discussing the liquidity risk of equity pledge,this paper first briefly introduces the development status of equity pledge of major shareholders in China,including the pledge scale,pledge method and process,risk and solution,and explains the liquidity risk and general measurement method.And then selected the cumulative pledge ranked fourth in the a-share market is more representative of the company ST silver billion were analyzed,and using the equity pledge is nearly 10 times as basic data,using La-VaR model to measure the liquidity risk and determine reasonable loan-to-value ratio,price positions,early warning,to the pledgee to pledge late decision-making and risk monitoring provides guidance.This paper adopts qualitative and quantitative research methods to put forward targeted Suggestions for the pledgee,listed companies and regulatory institutions to prevent and dissolve liquidity risks,so that when they participate in equity pledge,they can measure the liquidity risks brought by them and prevent them in advance,so as to reduce the possibility of losses.