On the whole, the introduction of preferred shares is a useful supplement to the existing capital market, which is in line with the direction of establishing and perfecting multi-level capital markets, whether for listed companies that need to solve financing needs or for investors to provide more investment tools. At the same time, the Guiding Opinions also made positive arrangements for the trading forms and tax relief of preferred shares, which is conducive to the promotion and popularization of preferred shares. However, considering the limited number of listed companies that actually have a strong demand for preferred shares, and at the same time, preferred shares occupy the distributable profits of common shares by diverting the funds invested by institutional investors, which may have some negative effects on common shares in the secondary market. On the whole, in the long run, preferred stock will bring positive significance to the A-share market, but in the short run, the practical application of the preferred stock system in the A-share market may be limited, or it may take longer to be reflected.

The influence of the pilot project of developing preferred shares on listed companies

Preferred stock, as a new financing tool with the characteristics of both stocks and bonds, can theoretically provide more financing tools for listed companies. For listed companies, the biggest advantage of choosing preferred stock issuance is that there is no need to dilute common stock rights and transfer voting rights to meet financing requirements. As for the setting method of preferred shares mentioned in the Guiding Opinions, the terms of preferred shares that issuers can design independently are very flexible, including determining the fixed interest rate/floating interest rate, whether it is necessary to distribute profits, whether it is necessary to accumulate profits to the next fiscal year when the profits are not enough to distribute, whether they have the right to participate in the dividend distribution of ordinary shares with ordinary shareholders, and setting the conditions for convertible and redeemable preferred shares. This is conducive to designing financing schemes that meet their own characteristics and needs according to the different situations of listed companies, and the flexibility is higher than that of ordinary shares and corporate bonds.

In order to be widely used as a financing tool in the A-share market, it is necessary to consider which companies will be willing to choose preferred stock financing. From overseas experience, preferred stocks are mostly used in the period of tight market liquidity or even bear market. At this time, listed companies encounter difficulties in issuing common shares and bonds. Preferred stock is a good tool to solve the financing needs of such companies with financial difficulties and low stock valuation in difficult times. In today's China, the unique characteristics of the financial system are: most of the listed companies with poor management and low stock valuation are blue-chip stocks. Due to the distortion of China's financial system, China's banking system, which is dominated by state-owned banks, still supports these listed companies in terms of loans, and the corporate bond market will not close them, which restricts the financing of preferred shares that need to bear the possibility of equity dilution and higher dividend requirements (above 7%). For another kind of private listed companies that also need funds, but have high valuation, in the period of high valuation (as long as the control of the company can be ensured), issuing additional shares is a cheaper financing method.

Four types of companies will have preferred stock financing needs. In practical sense, the number of listed companies with obvious demand for preferred stock financing is relatively limited, and these companies may be mainly concentrated in four categories: one is banks whose industries are bound by unique capital supervision requirements, and preferred stocks provide qualifications for inclusion in tier-one core capital that financial bonds cannot meet, which can help commercial banks that may not meet the requirements of tier-one core capital adequacy ratio in the Basel III standard of CBRC; The second category is that if some state-owned enterprises can be allowed to convert existing state-owned shares into preferred shares, it will help to increase the overall dividend ratio of state-owned listed companies, and at the same time "slim down" the huge state-owned blue chips and improve the governance of listed companies to a certain extent, but from the existing guidance, there is no adjustment in this regard; The third category is listed companies that can acquire assets or businesses of other companies with high ROE, but at the same time do not have the ability to refinance common shares (the price-to-book ratio is lower than 1 times, etc.). ); The fourth category is companies with high debt ratio and re-issuing bonds, mainly in power and other industries.

The influence of the pilot project of developing preferred shares on investors

For investors in the secondary market, preferred stocks provide more investment tools as a choice. Compared with bonds, preferred stocks provide investors with a higher rate of return, while compared with common stocks, they provide a higher claim to profits and assets, which is beneficial for investors to have more investment choices on the basis of comprehensive consideration of income and security.

Some arrangements in the Guiding Opinions may further enhance the attractiveness of preferred shares: on the one hand, the Guiding Opinions allow public offering and public trading of preferred shares, which makes the current design give preferred shares higher liquidity than the arrangement of directional offering and over-the-counter trading; On the other hand, the Guiding Opinions clearly stipulates that investors will enjoy the tax-free treatment of preferred stock dividends, which constitutes an obvious advantage of preferred stock over common stock; Therefore, preferred shares will attract institutional investors who need to pay attention to the matching of assets and liabilities in cash management, such as social security funds, insurance and enterprise annuities.

According to the Guiding Opinions, the proportion of national social security fund and enterprise annuity investment preference shares is not limited by the current proportion of securities investment, which means that social security fund and enterprise annuity investment preference shares will not directly crowd out other securities investment varieties (such as common stocks and bonds).

The influence of the pilot project of developing preferred stock on the stock market

The influence of preferred stock on the overall market is neutral;

The advantage is that preferred stock helps to reduce the financing pressure in the stock market, especially in banking, electric power, construction, transportation and other industries where companies with low valuation, large market value, high debt ratio, strong profitability and stable cash profitability (with dividend-paying ability) are concentrated. The application of preferred stock is expected to be high, because it may improve EPS, so it will benefit these industries to some extent.

Preferred stock and common stock * * * share the after-tax profits of the enterprise, so the dividend payment of preferred stock will have a certain diversion effect on the dividend payment of common stock, and objectively it will also compete with the investment of common stock.

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In the future, if we can further explore the use of preferred shares, such as introducing the experiment of converting existing state-owned shares into preferred shares, it is likely to enhance the attractiveness of state-owned common shares and bring greater vitality to the whole market.