Research On The Reduction Of Holding Shares Of Major Shareholders Of GEM

On April 29,2005,China’s capital market began the reform of non-tradable shares.With the advent of the era of full circulation of shares,the phenomenon of reduction of major shareholders has entered the social field of vision.Due to the low degree of legalization of the capital market and the weak supervision,major shareholders frequently reduce their holdings on a large scale in recent years,resulting in adverse economic consequences.Although in May 2017,the China securities regulatory commission issued new regulations on the reduction of holdings,it did not completely avoid the occurrence of large shareholders’cashing out by reducing holdings.Compared with other markets,the gem market has been established for a relatively short period of time,and the investment philosophy of external investors is not mature enough,which leads to the worse phenomenon of the reduction of major shareholders in the gem market.Thus,it can be seen that exploring the reduction behavior of large shareholders in gem plays a crucial role in creating a good investment environment.Due to the high technical barriers of the chemical industry in the gem market,the internal and external impacts on business operations are more.In this paper,jinlitai chemical co.,LTD.,a leader in the domestic automotive coating production industry,is selected as a case study company to study the reduction events of wu guozheng,two major shareholders of jinlitai,and naru holdings from 2016 to 2018 by combining the case study method and event analysis method.The real motivation behind the reduction of their holdings,the selection of ways to reduce their holdings and the preference to avoid the timing.When studying the economic impact of underweight behavior,in order to identify whether the stock price decline is related to the stock market systemic risk,this paper adopts the selective event study to further study the impact of the underweight of major shareholders.The data of 15 trading days before and after the announcement of reduction were selected as the window period,and the daily stock return rate of the case company and the industry index return rate of the sector in which the case company is located were used to obtain the change of excessreturn rate before and after the reduction of the major shareholders of jinlitai through the simple model of market adjustment.The results show that the reduction of major shareholders caused the company’s stock price volatility,which had a negative impact on the secondary market.Finally,in order to regulate the reduction behavior of major shareholders and put forward targeted Suggestions,respectively from the perspective of supervision,company and investors.Hope to promote the benign development of capital market through different subjects.