Divestiture And Share Repurchase Of Listed Companies

Share repurchases originated in the US capital market in the 1960 s.It wasn't until the early 1990's that the first share repurchase event occurred in Chinese securities market.In the early days when Chinese securities market was established,share repurchase incidents were mostly to solve the problems of Market-oriented reforms.At that time,Chinese laws and regulations imposed strict restrictions on share repurchases,which resulted in share repurchases not being accepted by the public and rarely used by listed companies.With the continuous progress and improvement of China's securities capital market in recent years,stock repurchases have begun to appear on the capital stage frequently.However,share repurchase have many methods.The motivations and consequences of share repurchase in different ways are also different.In this article,the author selects Yuntianhua's asset divestiture and share repurchase event as the research object.Yuntianhua repurchased shares held by Chinese government in 1999.The share repurchase event happened in 2013 is not a regular occurrence in Chinese capital market.Because in this case,Yuntianhua exchanged the assets for shares held by government,and then canceled that portion of shares.First,the author analyzes the motivations of Yuntianhua's divestiture and share repurchase based on the industry environment.Secondly,the author uses a variety of specific measures to analyze the effect of divestiture and share repurchase in detail from four aspects of market effect,financial performance,corporate governance and business performance.Finally,the author comes to conclusion and presents some suggestion of operation.The study shows that Yuntianhua's stripped the assets and repurchased the shares are aimed to improve its finances,to optimize its equity structure,and to focus its resources on the development of core business.As to economic performance,the stock price and financial situation have improved in the short term after the divestiture and shares repurchase event.However,the impact is not significant in the long run.Yuntianhua's corporate governance is determined by its nature,and it is less related to divestiture and shares repurchase.The company's business performance is mainly affected by the environment,and it is less affected by this event.This research has important realistic implications for the development of listed companies' capital operation strategies and the supervision of stock buyback.