China's A-share Market The Influence Factors Of Directional Issuance Price Effects Research

As the earliest recovery of refinancing, since the release of the Securities Issuance, private placement, compared with the public issuance and placement of shares and other equity refinancing, due to its simple audit procedures, low financing costs and high possibilities of successful issuing, are most favored by listed companies. Many scholars have studied the stock abnormal returns caused by it, but there are a few empirical researches on the impact factors of the issuance announcement effect. This paper attempts to analyze the factors affecting issuance announcement effect more comprehensively in China’s A-share market.The article first use the efficient capital market hypothesis as well as domestic and foreign mainstream hypothesis to analyze theoretically the effect of private placement, focusing on discussing the effect of market situation, additional objects, motives as well as the impact of investor sentiment on the issuance announcement effect.In this paper,494listed companies in China’s share market which implemented the private placement between May2006and December2010are chosen as the samples, by using the method of event study, we first examine the excess returns of the listed companies on the announcement day, and the results showed that on the issuance announcement day, the abnormal returns are significantly positive. Then on the basis of previous studies and according to the theory and hypotheses that may be the factors of the announcement effect of the A-share listed companies, the writer use the excess rate of return as the dependent variable to establish a multiple linear regression equation, the results show that issuance size of the company, additional objects and the motives have a significant positive impact, the relative distribution of private placement and capital structure of the listed companies have a significant negative impact. In addition, the factor of investor sentiment in the regression model obtain the expected sign and statistical significance, thus indicated that monitoring effect hypothesis, effects of ownership structure hypothesis, information asymmetry hypothesis and the theory of investor sentiment on China’s A-share market announcement effect has some additional explanatory power.Finally, we present relevant policy recommendations.