Research On The Announcement Effect Of Convertible Bond Issuance And Its Influencing Factors In China

Today,with the increasingly diversified financing methods of listed companies,convertible bonds,as a relatively special corporate bond,have received high attention in the capital market.On January 31,2021,the Measures for the Administration of Convertible Corporate Bonds began to be implemented.The CSRC clearly conveyed the signal of strengthening supervision,and the convertible bond market ushered in a new stage of development.This paper summarizes the research conclusions of the announcement effect of convertible bond issuance from a new perspective,theoretically supplements the research experience after the issuance of the "Administrative Measures",and puts forward suggestions to listed companies,investors and regulators.This paper focuses on the announcement effect of the issuance of convertible bonds and its influencing factors,and divides it into two aspects for research.One is the research on the announcement effect of the issuance of convertible bonds,and the other is the research on the factors affecting the announcement effect of the issuance of convertible bonds.Select 161 convertible bonds and their positive shares since the implementation of the "Administrative Measures" as the research samples.In terms of the research on the effect of the issuance announcement,calculate the average abnormal rate of return and the cumulative average abnormal rate of return of listed companies five days before and five days after the issuance announcement of the convertible bonds through the event study method and verify their significance.In the study of the factors affecting the effect of the announcement of the issuance of convertible bonds,the cumulative abnormal return CAR [-1,0] is selected as the explanatory variable.Through theoretical analysis and assumptions,the explanatory variables are selected from the company’s financial indicators and convertible bonds indicators,and the analysis is carried out through the multiple linear regression model.Further,through heterogeneity analysis,the differences in the announcement effect of convertible bond issuance and its influencing factors between enterprises with different life cycles and enterprises with different real controller attributes are studied.The study found that on the day before and on the day of the announcement of the issuance of convertible bonds,the announcement of the issuance of convertible bonds had a significant positive effect on the share price of the positive shares,and the second day after the announcement of the issuance of convertible bonds had a negative effect on the share price due to the terms of the allotment to the old shareholders and the automatic ex-right of the allotment market.In general,the cumulative abnormal returns in the window period [-1,0],[0,1] and [-1,1] are significantly positive,indicating that the issuance of convertible bonds is a positive event for positive shares.Secondly,the company size,equity concentration and initial conversion premium rate will significantly affect the effect of the issuance announcement,which shows that the advantages brought by the company size make the company’s share price better maintain stability in the face of event shocks;The higher the shareholding ratio of the major shareholders,the more likely the minor shareholders are to think that the major shareholders intend to infringe their own interests when there is an external impact,which is likely to have a negative impact on the stock price;The stronger the equity of the convertible bond,the stronger the confidence of the issuer of the convertible bond to investors in the future stock price trend,and investors will be more optimistic about the company’s prospects.Finally,this paper suggests that listed companies and investors take measures to better benefit from the positive earnings of the stock price brought by the effect of the issuance announcement,and suggests that the regulatory authorities take more flexible ways to manage convertible bonds while maintaining the supervision.