Stock Issue Market

The issuing market refers to the whole process of stock planning from selling to selling, and the issuing market is a market directly obtaining capital from the demand for funds. The establishment of a new company, the increase of capital or the borrowing of an old company, all through the issuance of the market, it is necessary to raise funds by means of the occurrence and sale of stocks, so that funds can be transferred from the supplier to the needs of the users, that is, converting savings into investment, thereby creating new real assets and financial assets, increasing the total capital and productive capacity of the society and promoting the development of social economy. This is the role of the primary market.

1. characteristics of the distribution market
The characteristics of the issuing market are: first, there is no fixed place, which can take place in investment banks, trust investment companies and securities companies, and can also openly sell new shares in the market. Two, there is no uniform occurrence time, and the stock issuers will decide when to issue them according to their needs and market conditions.

2. the formation of the market
The market is composed of three main factors. These three are stock issuers, stock underwriters and stock investors. The issuer's stock issuing scale and the actual investment ability of investors determine the stock capacity and level of development of the issuing market; meanwhile, in order to ensure the smooth conduct of the transaction, both the investors and investors can achieve their own goals smoothly, undertake the underwriting and underwriting of the intermediary issuing market of the stock, issue the shares to the issuer, and charge the issuers for the fees. In this way, the issuer will focus on the Underwriters, contact the issuers with one hand, contact investors with one hand, and actively launch stock issuance activities.

3. way of stock issue
Under the different political, economic and social conditions of different countries, especially the differences in the management of financial system and financial market, there are various ways of issuing shares. According to different classification methods, it can be summarized as follows.

(1) public issuance and non-public offering
This is based on the different objects issued. Public offering, also known as public offering, means that there is no specific issue object to publicly sell stocks to the majority of investors. In this way, we can expand the scope of shareholders, disperse shareholdings, prevent hoarding stocks or be manipulated by a few people. This will help improve the company's social character and popularity, and lay a solid foundation for raising more funds in the future. It can also increase the marketability and liquidity of the stock. Public offerings can be sold directly by a joint stock company, or can be paid by a financial intermediary agency. Non public offering, also known as private placement, means that the issuer only sells shares to specific issuers. Usually it is used in two situations: first, shareholders' rights issue, also known as shareholders' apportionment, that is, the stock company distributes the company's new share subscription rights to the original shareholders according to the face value of the stock, and mobilizes shareholders to subscribe. This kind of new issue price is often lower than the market price, in fact, it becomes a kind of preferential treatment to shareholders, and the general shareholders are willing to subscribe. If some shareholders are unwilling to subscribe, he can voluntarily give up the right to subscribe for new shares, or transfer the subscription rights to others, thus forming a transaction of subscription rights. The two is the private rights issue, also known as the apportionment of the third party, that is, the third shares that the stock company has to sell the new shares to the company's employees and customers other than shareholders. In this way, there are two kinds of considerations: first, to share the new shares to the specific person at the preferential price to show their care; two, when the new stock issue is difficult, the third parties are allocated to support it, whether it is shareholders or private placement, because the issue object is established, therefore, it is not necessary to adopt the public offering way, which can not only save the commission fees of the entrusted intermediaries, reduce the issuance cost, but also mobilize the initiative of shareholders and internal parties, and consolidate and develop the public relations of the company. But the disadvantage is that the stock of such non-public offering is poor in liquidity and can not be sold openly in the market. It will also reduce the sociality and popularity of the stock company, and there is still a danger of being bargained and held.

(2) direct issue and indirect issue
This is based on the way the issuer sells shares. Direct issue is also called direct offer. It means that a share company undertakes all the business and issuing risks of the stock issue, and sells the shares directly to the subscribers. When issuing direct distribution, the issuer should be familiar with the stock exchange procedures, and be proficient in the technology of offering shares and have certain conditions. If the subscription amount is less than the planned amount, the initiator of the new stock company or the board of the existing stock company must subscribe for the shares sold. Therefore, it is only applicable to stocks with fixed issue or less risk and simple procedures. Under normal circumstances, the issue of stocks that are not publicly issued or because of difficulties in public issuance, such as poor market competitiveness and low cost of issuance, which are caused by low credibility, or large share holding companies that are capable of achieving large private placement to save the cost of issuance, are only issued directly.
Indirect issuance, also known as indirect stock offering, refers to the way that a sponsor entrusts a securities issuing agency to sell shares. These intermediaries, as the promoters of stocks, deal with all issue issues, undertake certain issuing risks and extract corresponding earnings. There are 3 ways to issue stock indirectly: one is selling on commission, or another is proxy solicitors. The promoters are only responsible for selling shares according to the conditions of the issuers, acting for the prospectus business, and not undertaking any risk of issuing, how much they can sell within the agreed period, and the stock that is still out of stock will be returned to the issuer. Since all issuers' risks and responsibilities are borne by issuers, intermediaries of securities issuing agencies are only promoted on behalf of the issuers, so the commission fee is relatively low. The two is the underwriting, also known as the share purchase, and the signing of the sales contract between the issuer and the securities issuing agency clearly stipulates that within the agreed period, if the result of the actual sales of the intermediary fails to meet the amount stipulated in the contract, the difference will be partially borne by the intermediary itself. This method of distribution is characterized by the ability to guarantee the completion of stock issuance, which is generally more popular with issuers, and intermediaries need to bear certain issuance risks, so the underwriting fee is higher than the commission fee. The three is underwriting, also known as package buying and offering. When issuing new stocks, the securities issuing agencies first use their own funds to buy all the stocks that will be publicly issued at once, then sell them gradually according to the market situation, and the intermediaries earn the difference between them. If there are slow-moving stocks, intermediaries sell at reduced prices or hold on their own, because issuers can get all the funds raised quickly, while the promoters must bear the risk of issuance. Therefore, the underwriting fee is higher than the commission fees and underwriting fees. When the stock is issued indirectly, which method is adopted, issuers and promoters consider different angles and need to be determined by the two sides. Generally speaking, issuers mainly consider their reputation in the market, the time of use, the cost of issuing and the trust of the promoters.

(3) paid capital increase, free capital increase and matching capital increase.
This is divided according to whether investors pay shares when subscribing shares. Paid capital increase means that the subscriber must pay the cash according to a certain issuing price of the stock, so as to get a way of issuing shares. In general, public issuance of shares and private equity issue and private rights issue in private placement are paid by way of replenishment. In this way, issuing shares can directly raise capital stock from outside and increase capital of stock companies. Free capital increase means that the subscribers do not have to pay cash to the joint stock company to get the way of issuing shares. The issuing objects are only limited to the original shareholders. The stocks issued by this way can not directly raise capital stock from the foreign office, but rely on reducing the accumulation fund or surplus balances of the joint stock companies to increase capital. Generally, only when the dividend payment of stock dividends, stock split and statutory reserve funds or surplus are converted into capital allotment, the new stock is delivered to the original shareholders free of charge according to the proportion. The purpose is mainly for the benefit of shareholders, so as to enhance the confidence of the shareholders and the company's reputation, or to adjust the capital structure. Since the issue of free payment is restricted by the source of funds, it is not usual to issue shares in this way. Matching capital increase means that when a share company shares the new shares with the original shareholder, it only allows the shareholders to pay a certain amount of stock by paying part of the issue price. For example, a shareholder who subscribes for a stock of 100 yuan will only have to pay 50 yuan, and the rest will be paid free of charge by the company's provident fund. This way of issuing is also a privilege to the original shareholders. Only part of the shares can be collected from them, and the company's capital increase plan will soon be realized.

There are advantages and disadvantages and constraints in the way of issuing these shares. When issuing shares, a joint stock company may adopt some of its methods, or adopt several ways simultaneously. At present, the most common and widely used way in the world is public and indirect issuance.