Analysis On The Motivation,Effect And Compliance Of Overweight With Overall Protection In Listed Companies

In 2015,China's stock market experienced a big shock,A shares drop sharply in large scale.In order to maintain the market,and to prevent systemic risks,regulators have proposed a "five-for-one" requirement,to encourage listed companies to support their stock prices by increasing their holdings,buying back shares and offering equity incentives.“Overweight With Overall Protection” appeared in this context.This paper takes the bottom-pocket overweight trend emerging in the market in mid-2017 as the entry point,take Eastern Gold Jade as an example,which is more typical.Based on signal transfer theory,this paper try to reveal the the real effect of the verweight with overall protection and the intrinsic motivation of listed companies to increase their holdings in the background of market fluctuation,,by analyze its financial pressure,debt crisis and the holding shareholder's equity pledge liquidation pressure.This paper focuses on the analysis of the current bottom-pocket holdings of the relevant rules and regulations,deeply reflected on the faultiness of overweight information disclosure requirement ? the lack of market investor interest protection system in stock market.This case mainly draws the following conclusions through analysis: First,listed company try to maintain price so as to ease the equity pledge unwind pressure of major shareholders and people acting in concert,and on this basis to help the former to take the opportunity to readuce holdings to obtain benefits;Second,even in the short term,bottom-pocket overweight will not necessarily cause a positive effect on stock prices;Third,as a new tool in the capital market,overweight with overall protection involves these problems,such as whether employees and major shareholders constitute a person acting in concert,which relates to whether or not the tender offer is triggered and the latter could reduce the holdings after the employees increases the holdings.Anather problem is that whether the information disclosure of listed companies is perfect,and it create unfair competition in the market,which causes small and medium-sized investor interest protection and other compliance issues.Based on the study of this case,the following suggestions are given: From a management perspective,first,We should complet the corresponding legislation of underwritten overweight;Second,set access door for the bottom-pocket overweight;Third,the compliance of relevant behaviors should be clearly defined,mandatory disclosure of information to the promisee and the controlling person should be restrained from relevantbehaviors during the overweight period In order to protect the interests of small and medium investors.Forth,for those try to maintain the stock price through hot spot,and harm the interesting of investors,management should give them punishment,and effectively strengthen investor education.