A New Risk Model And The Analysis To Default Of Share Placements

Securities business of China had been set up for almost 20 years, but it is still just begin, the management, law are far from consummate, it lead to phenomenon that the profit of small shareholders are always tampered. Chief biggest shareholder phenomenon is so common in China as well as the whole Asia, and it will make it easier to tamper the small shareholder. Transformation of country's enterprise is going on, and lack of supervision, all these background factors make the tampering harder.Share placements, should be an way of refinancing, it should not cause small investors excessive loss outside the normal fluctuations. But it turn out to be a trap sometimes in China, Large peculation is noticeable, also Information disclosure system isn't effective. All these make even professional cannot gather the insider imformation. Let alone small inventors.In this paper, we are going to study the Default Possibility to small inventors after share placements. Through mathematical model.The organization of the paper is as follow: in section 1, we are going to introduce the status of stock market and share placements, overview the credit risk models. In section 2, we will offer a new model to predict the default possibility of small inventors, and test it with data from Chinese stock market. In section 3, we will talk about the relevance of the model and offer a way to improve the model. Through this model small inventors can predict the default possibility after share placements, then exclude the stock which maybe fluctuate excessively from their portfolios.