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Listed as a whole and its impact on shareholder value

Author: ZhangLi From: www.yourpaper.net Posted: 2009-04-03 06:52:19 Read:
[Abstract] listed as a whole has become a hot spot of China's capital market, whether it applies to any group, it will increase shareholder value? Explore the meaning of the overall market, the boundary of the overall market, the overall market policy environment to start in-depth analysis of the overall market impact on shareholder value. Come Enterprises Group's overall market conditions, the conclusion of the shareholders the only EVA is listed as a whole benefit.
[Key words] listed as a whole; shareholder value; EVA

A concept and characteristics of the overall market

(A) the concept of the overall market
The overall market, generally refers to the stock market in China the previously ubiquitous enterprises come up with part of the assets or industrial spin-off in terms of financial innovation, which is listed on the main formed by the previously spun off a subsidiary of the Group relative independent stock company into a group of companies that has been transformed into a stock company. The ultimate goal is listed as a whole, rather than just part of a group of companies production processes to achieve the Group's operating assets overall listing. This article refers to the overall market, together with the overall generalized to include the following two situations listed group companies the main industry is listed as a whole and the group of companies listed company after the merger or new merger between peers listed as a whole.
The main features of the overall listing is:
1 main factors of production unchanged, is conducive to maintaining the continuity of business operation;
(2) economies of scale and synergies, to avoid a single business operational risks;
Company management level is relatively clear;
Related party transactions, to easy public disclosure of information, increase transparency of company operations;
5 original staff in listed companies, there is the problem of whether the listed company to avoid internal staff conflicts;
Increase the scale of financing to expand the market value of the circulation, enhance mobility;
7 help shape the corporate brand and unified external image.
(B) the overall market boundaries theoretical analysis
School of economics of the new system using the concept of transaction costs, in-depth analysis of the problem of generation and its boundaries are determined by examining the relationship between the internal operation and business to business. Coase (1937), the most significant feature is the price mechanism substitutes, market and business are two different and each other alternative means of resource allocation, the boundary is determined by the transaction costs of. On the market, the allocation of resources through the price mechanism, the establishment and use of the price mechanism are transaction costs or expenses, including the discovery of the cost of the price, consultations and reached the cost of the contract and to ensure the execution of the contract costs. Under conditions of uncertainty, the cost of such transactions is quite huge. Within the enterprise, the allocation of resources is carried out through a system of internal departments and authority relations. Enterprises are able to produce, because companies can eliminate the cost of price discovery, and greatly reduce the cost of consultation and ensure that the costs of implementation. However, companies can not endless expansion continues, because of enterprises, including market transactions at the same time, generate additional management costs. When the increase in management costs and market transaction costs savings is equivalent to the boundary equilibrium, the extension of the scale of the enterprise is no longer expanding. On this basis, Harvard University, Hart et al published the theory, they believe that if different assets are complementary, then its assets in the same organization with low transaction costs, because the parties will choose a low-cost contract to configure ownership; Conversely, if different asset complementary nature of its assets within the same organization operating income decreasing. Thus, the boundary is not static, but should be based on the transaction costs and the efficiency of asset allocation and make appropriate adjustments. Listed as a whole can be seen as its boundary adjustments, the enterprise business related party transactions between the parent company and subsidiaries of the Group most of them are converted into listed companies within the allocation of resources, a distinct advantage for listed companies in the long-term development, but also conducive to the entire enterprise groups to reduce transaction costs and the optimization of the efficiency of asset allocation. Listed as a whole, however, to establish the appropriate boundary is not unconditional, if the lack of complementary assets, the assets within the same organization operation gain or configuration of efficiency is decreasing, it should not be involved in the overall listing.

Second, the overall market policy background

Since the 2004 TCL Group took the lead in the implementation of the overall market, especially the split share structure reform, the overall market has become a long-term interest of China's capital market. TCL Group, Brilliance shares Wuhan Steel shares then Shanggangjixiang of, Shanghai Automotive, etc., capital markets set off one of the overall market boom, the overall market to become a beautiful landscape in the recent capital market by investors in hot pursuit.
(A) capital market strategy has been established
Due to historical reasons, the initial period of China's capital market is still in the experimental stage, the role and status of the capital market has not been clearly established, therefore, the vast majority of state-owned listed companies with the pilot nature, listed companies only group of companies a window Group companies often come up with only part of the assets listed. Smaller listed companies, profitability is not strong, we can not truly reflect the strength of Group companies. However, after 10 years of twists and turns, released in early 2004, "the State Council on the promotion of capital market reform and opening up and stable development of a number of opinions" as a symbol of the capital markets an important strategic position in the national economy has finally been established. "Opinions" clearly pointed out that the CPC Central Committee and the State Council to make important decisions from the point of view of the overall situation and strategy vigorously develop the capital market, various localities and departments must attach great importance to establish the overall concept, fully aware of the importance of the development of the capital market, and actively promote the reform and opening up and stable development of China's capital market. With the establishment of the strategic position of the domestic capital market, the split share structure reform to solve the problems left over by history vigorous start in April 2005 and carried out smoothly. Take this opportunity to the development of the domestic capital market has made significant progress, the role of the capital market more and more attention, and get more and more favorable play. In this context, the use of capital markets to the rapid accumulation and concentration of capital, firm size and competitive strength, in order to meet the global economic integration and international competition has become an urgent task. Listed companies to improve the quality of listed companies to promote and expand business scale and strength, bigger and stronger, and large enterprises listed as a whole came into being.
(B) The Commission supports large enterprises listed as a whole
August 23, 2005, the China Securities Regulatory Commission, the State-owned Assets Supervision and Administration Commission of the State Council, Ministry of Finance, People's Bank of China, the Ministry of Commerce five ministries jointly issued guidance on listed companies split share structure reform "made it clear that: solve the problem of split share to support the large blue-chip enterprises directed to issue shares through its holding of listed companies to achieve the overall market; listed companies to support the diversification of means of payment, such as shares, convertible acquisition by way of merger and reorganization merger by absorption, and promote listed companies and Make 2 November of the same year, the State Council issued the "State Council approved the Commission on Improving the Quality of Listed Companies of the notice" (Guo Fa [2005] No. 34). The Commission views on the improvement of the quality of listed companies, "clearly stated," the use of capital markets to support high-quality enterprise and Make local government should actively support high-quality listing of enterprises, and promote state-owned enterprises relying on the capital markets, restructuring and reorganization, quality resources to focus on listed companies, support for high quality, large-scale enterprises to achieve the overall market conditions. "
(C) support of the SASAC central enterprises listed as a whole
December 5, 2006, the SASAC issued guidance on the promotion of state-owned capital adjustment and restructuring of state-owned enterprises. Major policy initiatives, "guidance" clearly states: "vigorously promote the restructuring and listing, to improve the quality of listed companies to actively support good corporate assets or main business assets to achieve the overall market, to encourage state-owned holding company has been listed by the capital increase , acquisition of assets, etc., all the main business assets into the listed company. "January 6, 2007, meeting of the heads of central enterprises, the SASAC Director Li Rongrong said that in 2007, the SASAC will accelerate the joint-stock reform, actively promote the conditions of the central enterprises to the overall restructuring of the parent listed or main business is listed as a whole; encourage, support central enterprises do not have the overall conditions for listing, the the excellent main business assets gradually into the listed company, and Make a listed company.
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