How Does The Strong Retirement System Create Different Delisting?

The level of the delisting rate will be consistent with the change of industrial life cycle.

We will define the number of listed companies every year or the number of listed companies at the end of that year as delisting rate. Historically, the delisting rate of emerging market stock is far lower than that of developed countries. Although A shares have long established a delisting system, there are only 88 delisting companies in A shares, and the overall delisting rate is relatively low. The average delisting rate from 03 to this year is only 0.36%, while the average annual delisting rate for US stocks is 7.37%.

Most of them stop and do not conform to the market rule of survival of the fittest.

Blindly raising the delisting rate is also undesirable. Delisting is more than a means to maintain market order rather than a goal. The level of the withdrawal rate should conform to the change of the life cycle of the industry. Enterprises entering the recession can opt out or realize pformation. For example, during the Internet bubble, the emerging technology industry in the United States is attacking traditional industries, and its development space is squeezed, resulting in a higher overall delisting rate.

The "13th Five-Year plan" outline put forward that we should deepen the public innovation, vigorously develop the third industry, and realize the pformation and upgrading of the economic structure. In the 15 years, the contribution of the third industry to GDP reached 57.4%, an increase of 10 percentage points over the same period of 14 years. Under the background of rapid economic upgrading, the development prospects of the listed companies in the recession period are dim, and the profitability is weak. The more suitable choice is delisting or pformation.

After all, the most important function of the stock market is financing. The purpose of the delisting system is to eliminate backward production capacity, and to provide financing for developing enterprises to avoid blood pfusion.

This phenomenon occurs.

Under the rule of law, compulsory delisting will lead to active delisting.

From the delisting type, A shares take the initiative to withdraw from the market (such as privatization, suspension of disclosure of information, pfer boards, etc.), because the financial indicators are not up to standard and choose to take the initiative to withdraw from the market can not be strictly referred to as active delisting. The proportion is not high. From 01 years to now, the proportion of companies who choose privatization and suspend disclosure information to achieve delisting is only 11.8% and 3.5%. Under the strict auditing and issuing system, the high valuation level of A shares is the main reason for the reduction of the willingness to withdraw.

In the international mature market, active delisting accounts for a higher proportion. Data show that 98 to 07 years, about half of the NASDAQ delisting companies choose to withdraw from the market actively, while the NYSE took the initiative to withdraw the market share of 67%, 01 to 13 years, about 70% of the UK's active delisting.

In the final analysis, the delisting is a commercial choice to measure the cost and benefit, and the delisting is also beneficial to reduce the commercial cost, make the management focus on the long-term development of the enterprise, reduce the agency cost, and reduce the disclosure of sensitive information. With the promotion of the legal process of the compulsory delisting, the market no longer provides a high premium valuation for the companies with the risk of delisting, and the return on the qualification of the listed companies will be reduced, and the active delisting will be a more sensible choice for more enterprises.

The excess returns of sub shares are getting smaller and smaller.

The plate is hard to get excess returns.

A total of 8 listed companies of A shares were delisted in October 14, and 4 of them were re listed through merger and absorption. *ST double and Guo Heng had been delisted for four consecutive years of losses. They received the notice of termination of the exchange in May 15th and 21st of 15 years, and were forced to withdraw from the market.

In order to consider the short-term impact of the withdrawal of the strong retirement system on the market, we take the three companies listed as the starting point on the announcement of the termination of the listing on the exchange, and take the CSI 500, which represents the medium and small market capitalization, as the reference benchmark, to examine the relative gains performance of the new stock market and the backdoor listing section in the next three months.

Over the 3 months before the announcement of the listing of the Hong Kong stock exchange, the excess earnings of the new shares and the backdoor listing sections were 165% and 30.8% respectively, and the latter three months were 108.8% and -3.7% respectively. In the 3 months before the announcement of the Bo Yuan's listing, the excess earnings of the new shares and the backdoor listing sections were 96% and 4.3% respectively, and the three months after that were 46.5% and -3.2% respectively.

In the final analysis, sub shares are also potential shell companies, whose valuation includes shell premium valuation, resulting in A shares price earnings ratio far higher than that of mature markets such as Europe, America and Japan. When the strong retreat system opens the door of the delisting, the valuation of shell resources premium shrinks, which makes the valuation of newly issued new shares narrowed and the excess return of the new shares is getting smaller and smaller.

The backdoor listing sector includes listed companies that have borrowed shell and rumors will backdoor. After the delisting event, the enthusiasm of the market for shell companies will decline.