Refinancing loosening one by one to interpret A-share market catalyst?
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If you look at it from a rational and professional point of view, you can sum up the idea of the New Deal in one sentence: decentralize power to the market, be more tolerant of listed companies, and increase the requirements for investors. After three months of soliciting opinions, the new rules for refinancing were finally implemented on February 14, 2020.
The new rules for refinancing have brought the otherwise quiet weekend to life, and people from all walks of capital markets have interpreted them.
Will the new rules of refinancing have some impact on the capital market?
Therefore, “Daily Financial Report” provides readers with accurate interpretation.
What re-financing is straightforward to say, the act of a listed company’s direct financing on the securities market is called re-financing.
In general, there are two refinancing methods that we are familiar with: private placement and rights issue.
A private placement is referred to as a fixed placement, which refers to the non-public issuance of shares by a listed company to a qualified minority of specific investors.
There are two keywords in it: specific investors and non-public. A certain amount of intelligence is set up to protect small and medium investors with weak risk tolerance. Because it is quoted in the way of public issuance and bond issuance, it will definitely increase the number of listed companies.The requirements are relatively small, including the requirements for profit distribution, financing scale, and issuance frequency. Therefore, the risks are relatively high. In the current market, institutional investors are generally involved in the fixed increase.
Rights issue refers to the behavior of a listed company to further issue new shares to the original shareholders to raise funds in accordance with the needs of the company’s development. It is significantly different from the fixed increase. The issue of rights issue is the current shareholders of the company.The rights issue is a refinancing method of public offering.
In order to attract more shareholders to participate, the rights issue will generally place a certain number of newly issued shares at certain specific prices below the market price, but the final decision on whether to participate in the rights issue is in the hands of the shareholders themselves.
The new rules are interpreted one by one in accordance with the official documents issued by the Securities and Futures Commission. The “Daily Financial Report” refines and explains the various policies and regulations, and strives to 武汉夜生活网 present them in the most plain and understandable language.
The first is to adjust the number of non-public offerings of the main board and the GEM to a large number, from 10 and 5 to 35, respectively.
This article is mainly aimed at the fixed increase method mentioned above. Since the fixed increase is targeted at a small number of specific investors, a quantitative regulation of the number of investors is required. The new regulations will relax this restriction, meaning morePeople can get involved.
Second, the non-public issuance price was changed from the original 90% of the average price of the 20 trading days before the benchmark date to 80%. This is the same as when selling goods at a discount.
As we mentioned above, in order to attract more investors to participate, listed companies often issue discounts, and now 80% is replaced by a 90% discount, which reduces the refinancing difficulties for listed companies and enables investors toI’m glad to buy cheaper stocks.
Third, the lock-up period for non-public offerings has been shortened. The original controlling shareholder was not allowed to transfer for 36 months, and ordinary investors were not allowed to transfer within 12 months. Now the time has been halved, changed to 18 months and 6 months, respectivelyRestricted by the reduction rules.
To understand the meaning of this new regulation, you must understand what the purpose of the lock-up period is.
In fact, the lock-up period is set up to bind itself, the shareholders and the company’s operating performance together, to prevent the phenomenon of large shareholders cashing out and leaving after financing.
In order to be able to sell the stock at a high price after the lifting of the ban period, the company’s shares and major shareholders must also make every effort to ensure that good performance is locked in order to maintain performance.
And whether before or after the new regulations, the lock-up period of ordinary investors is shorter than that of the controlling shareholders, which means that ordinary investors have the right to withdraw first, and it is also a protection for small and medium investors.
The new regulations will shorten the lock-up period. First, it will relieve pressure on listed companies, and second, it will delegate power to the market and increase liquidity.
Fourth, the conditions for the non-public issuance of shares on the GEM to be profitable for two consecutive years, and the asset-liability ratio at the end of the latest period of public offering of securities to exceed 45%.
Obviously, the two keywords “closed” and “public” indicate that the former is for fixed growth and the latter is for rights issue.
Understand it literally. The new rules did not meet the two consecutive years of profit. It was not possible to increase the profit. The latest period of asset-liability ratio exceeds 45% can not be allotment. Now it is all right, which means that the restrictions on listed companies have been lifted.Companies that have come to refinancing requirements can also participate.
Lastly, the validity period of the refinancing approval was extended from 6 months to 12 months.
Prior to the new regulations, listed companies need to complete refinancing projects within 6 months after obtaining approval, otherwise they need to re-proceed the process, and now double the time left for companies, and companies can be more flexible and calm in refinancing.Can also increase the success rate of issuance.
What substantive impact on this new refinancing regulation of the Securities and Futures Commission has been interpreted by the market as a major positive as soon as it is issued, in fact, it has not reached this level, and of course, it is even more unlikely to be negative.
Under the influence of the current epidemic, it can be easily interpreted as a pair of policies to save the market. However, from a rational and professional perspective, the New Deal idea can be summarized in one sentence: delegating power to the market, and more to listed companiesTolerance and increased demands on investors.
From the information transmitted by the regulators, the internationalization, marketization, and institutionalization of the capital market are becoming more and more obvious. The previous idea was to protect the interests of small and medium investors. Therefore, various restrictions have been set for listed companies.Judging by the requirements of the new regulations, many restrictions have been lifted, including lock-up periods and profitability, as well as debt levels.
The liberalization of restrictions means that investment risks have also risen. Listed companies can refinance, but investors actually pay for them, and investors need to improve their risk identification and tolerance. This was the science and technology board that opened last year.
Some people from the outside have sorted out a lot of sectors and industries that have been greatly favored. When you think about it with rational thinking, it turns out that this is not the case. It is more an emotional one. Every time a policy is introduced, it is used to interpret it as negative or positive.It is the product of the “dualistic” thinking model.
As mentioned earlier, the fixed increase in refinancing is mainly participated by institutional investors, and the institutions are professional and rational, and even liberalized. It is difficult for companies with average or bad qualifications to obtain institutional approval, and at the same timeIt means that the new regulations have no meaning to it, so it is difficult to find an industry with a positive certainty. If you have to find one, you may have to count the securities companies, because liberalizing the restrictions will inevitably result in incremental refinancing issuance, andThe brokerage’s investment banking business is an indispensable part of it, and it will definitely get a share of it.
(This article is for the purpose of conveying more information. The content of the article is properly referenced and does not constitute investment advice.
Investors do so at their own risk.