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Discussion on the debt financing of listed companies in China

Author: HeYiShan¡¡LiuGuoJiang¡¡LiYan From: www.yourpaper.net Posted: 2009-07-29 01:47:09 Read:
Abstract: Due to the economic system of China's enterprises and financing environment and the Western countries there are some differences, the capital structure of listed companies in China presents different characteristics with Western financing pecking order theory, that listed companies prefer equity financing and contempt debt financing. In this paper, by analyzing the causes of such a financing structure proposed countermeasures to improve the financing environment and adjust the capital structure proportion, in order to rationalize the capital structure of listed companies in China. ª¥
Keywords: capital structure; capital structure optimization; financing structure ª¤ ª¤

1 Current Situation of China's listed companies financing ª¤

The overall low level of 1.1 asset-liability ratio ª¥
The author calculated according to the listed companies over the years 2000-2003 over the average asset-liability ratio of listed companies, and asset-liability ratio of the enterprises nationwide comparison ª¥

From the above table, we can see that China's listed companies over the years, the average balance was less than the national average level of the enterprise. The balance of the listed companies in 2000-2003 rate of around 50%, while the average asset-liability ratio of China's enterprises in the 60% or so. Lower asset-liability ratio of China's listed companies, some of which are listed companies in asset-liability ratio is low unbelievable difficult to balance in 2000 the lowest rate of 20 listed companies, the lowest ST entrepreneurial only 0.91%, the highest in Jiangsu the sun is only 11.31%. ª¤
1.2 liabilities structure is not rational, and the high level of current liabilities ª¥
The low overall level of asset-liability ratio of China's listed companies, but has a higher proportion of current liabilities to total liabilities. In general, current liabilities accounted for about half of the total liabilities is reasonable, if the ratio is high, the listed companies will lead to changes in the financial market environment, financial difficulties such as bank interest rates to rise, but we can see from the table out, 2001 to 2003, China's listed companies in current liabilities during the four years the proportion of total liabilities of up to 78.47% on average, about an average of 11.85 percentage points higher than the national enterprises. ª¥

Note: (1) indicates that the current liabilities of the proportion of total liabilities; ¢Ú represents the proportion of current liabilities to total assets ª¥
Source: ¢Ù the National enterprise data derived from the 2000-2002 period, "the People's Bank of China statistics quarterly; ¢Ú http://www.cfen.cn ª¤
1.3 Endogenous low financing ratio, prefer equity financing ª¥
Chinese scholars of empirical studies have shown that the apparent conflict exists, the order in which the financing of listed companies in China with the modern theory of capital structure on the pecking order principle. Through data analysis of listed companies in China's external funding sources, selected samples for the end of 2003 in the Shanghai and Shenzhen stock listed company, the period to 2003 ª¥

Source: ¢Ù The http://www.cfen.cn ¢Ú The http://www.cnstock.com ¢Û The http://www, bachina.com data are compiled ª¥
Can be seen from the table, the total external financing of listed companies in 2003 accounted for only 8.90% of the total external funds, bonds, equity financing accounted for an absolute advantage, accounted for 66.59% of the total funds raised in the external. ª¤ 2 reasons ª¤
affect the financing structure of listed companies in China

2.1 Capital market imbalances ª¥
From the actual situation of our country, there are structural imbalances in the development of the capital market. Mainly follow the traditional mode of approval in the stock market and the government bond market is the rapid development of expanding and scale build-up at the same time, corporate bond issuance, the issue size to implement quota management, issue size is limited, resulting in lack of power of issuing bonds in (1) and enthusiasm for the development of debt markets lag; (2) The functions of commercial banks in China has not been perfect, and the risk of long-term loans, such financing institutions do not prefer long-term loans. ª¤
2.2 imperfect development of China's bond market ª¥
China's bond market is imperfect development of the non-market stage, enterprises issuing bonds strictly limited by the government credits, so that the enterprise through very small room for bond financing. Our country since the issuance of corporate bonds in 1986, issued a total of more than 3,000 billion yuan, an annual average of just over 200 billion, in 2000 listed companies through equity financing of 155.4 billion yuan, 10 billion yuan of corporate bonds, 6.4% of the equity financing. ª¤
2.3 poor financing channels, the savings can not be successfully converted to investment ª¥
In recent years, China's resident deposits an average rate of about 17% per year in the rapid growth of savings deposits of urban and rural residents in China has exceeded 10 trillion yuan in 2002 to the first quarter of 2004, China's urban and rural residents' deposits up to 150,000 billion, more than 2003 GDP, nearly four trillion yuan "But at the same time, the speed of bank loans since 1993 is always lower than the the deposits increased speed makes the financial institutions, the loan-to-deposit difference risen sharply. ª¥

In 2005, financial institutions RMB deposit gap has reached 9.2 trillion yuan, almost close to the year the GDP of our country, "this means that the banks did not make up to 9.2 trillion yuan of funds into the investment, but in order to cash, government bonds pass on the central bank in the form of deposits to the monetary authorities to some extent caused by the illusion of "surplus funds", while at the same time, many small and medium enterprises for funds to run around, some companies due to raise enough funds and had to resort to the civil usury nature of the loans, reportedly very active in many areas of civil financing, private financing interest rates are generally up to 10% to 20%, the desire for this kind of enterprise funds, fully shows China " insufficient funds. "phenomenon. ª¤
2.4 financial products innovation to the lack of support for the basic product ª¥
Continuous innovation in financial products is an important symbol for high efficiency operation of the capital markets, "according to the division of the Bank for International Settlements, innovation of financial products can be divided into: type of risk transfer, increased liquidity and credit creation type. Innovation in financial products is quite development based on corporate bonds based, such as asset securitization, with entitlements bonds, interest rate futures, but the development of corporate bonds in the capital market in China is very backward, innovation in financial products lack the support of this important foundation of corporate bonds, which difficult to effectively expand based on corporate bonds, financial innovation and the operation of the organizations, not only seriously affect the efficiency of the capital market in the allocation of resources, but also seriously affect the operational efficiency of all types of assets in the financial markets. "ª¤

Optimized bond financing ways ª¤

3.1 to establish a unified bond market, to accelerate the bond market innovative ª¥
The management of China's bond market related to the number of economic management departments, in a divided state, it is necessary to establish the coordination mechanism of the bond market, to strengthen coordination and cooperation between the departments in relation to the major issues of global, fully listen to all market participants the views of the reform and development costs down to the lowest point, the establishment of a unified and efficient bond circulation market, reduce transaction costs for market participants to provide quality and efficient services. ª¥
China's bond market a single product, poor access, severely retarded the development of the bond market, the bond market can not play its due role, has led to claims of lack of funds of listed companies in China exogenous, and thus prefer equity financing. Bond products to speed up innovation, in line with the accelerated process of China's market-oriented interest rate, the progress of the opening up of financial markets as well as the bond market development needs, the only way to make the function and role of the bond market should play to promote China's financial market with the development of the national economy. ª¤
3.2 improve the relevant system for the development of the bond market to create conditions ª¥
Bond issue on the market, the change of the macro-management of the corporate bond market, reducing administrative intervention. Appropriate to relax the conditions of approval of the bond issue, may increase the risk of its positive significance can not be ignored - to broaden the financing channels, to provide a better external environment for the enterprises to optimize the capital structure. The state should take the issue of market-oriented way, cancel the examination and approval system, listed companies issue size, price autonomy from the government's strict control. To accelerate the Companies Act to amend, modify the terms of the corporate bonds continue to implement the provisions of the administrative examination and approval and the provisions of the corporate bond issuance scale is determined by the State Council. Bonds issued in line with the principles of market economy. Relax the restrictions of the "Provisional Regulations on corporate bonds, interest rate, term, and use of funds. ª¥
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