It is necessary to distinguish between the concepts of "emission" and "issue of shares". A share issue is a registered in due course the aggregate of shares of one issuer with one state registration number, which may have different emission conditions, but provide the same rights.
Issue of shares - a set of actions of the issuer regarding the subscription to shares, i.e. the activities carried out by the issuer from the decision to issue shares to the registration of the issue of shares. In other words, the authorized capital is associated with the concept of the issue of shares, and the procedure for its formation - with the issue. Thus, the issue and issue of own shares for joint-stock companies is primarily associated with the formation equity embodied at this stage in the authorized capital.
The emission process includes the following steps:
1) adoption by the general meeting joint-stock company placement decisions valuable papers;
2) adoption by the issuer (approval by the board of directors) of a decision on the issue of securities;
3) preparation of a prospectus for the issue of securities;
4) registration of the issue and prospectus (carried out by the Federal Commission for the Securities Market - FCSM);
5) disclosure of information contained in the mass media;
6) production of certificates of securities;
7) placement of equity securities;
8) registration of a report on the results of the issue of securities;
9) disclosure of information contained in the report-message in the media;
10) registration of amendments to the articles of association.
The main stages of the implementation of the first issue of shares in open and closed joint-stock companies of Ukraine are shown in fig. 2.16.
The prospectus for the issue of securities contains three sections:
1) data on the issuer;
2) information about financial condition issuer;
3) information about the forthcoming issue of securities.
According to Civil Code of Ukraine dated February 23, 2006 No. 3480-IV "On Securities and the Stock Market" joint-stock companies have the right to issue only registered shares of two types - ordinary and preferred shares, and the share of the latter in the authorized capital of the joint-stock company should not exceed 25%. The share has a par value of at least 1 kopeck. Ordinary shares are not subject to conversion into preference shares or other securities of a joint-stock company.
Preferred shares enable their owners to receive guaranteed dividends in the form of a fixed percentage and par value of the share and in the form of a fixed absolute amount. Dividends are paid to the holders of their shares after the holders of the bonds, before the holders of the ordinary shares. This paper does not give the right to manage the company, and in some cases to redeem these shares from their owners at predetermined prices, for example, due to an unexpected increase in their market value. Ordinary shares are also redeemed, but for other reasons: to prevent a takeover by another company; when managers try to convince shareholders and investors that shares are undervalued in the market, as a result of which the prices for these securities rise sharply. In a sense, preferred stock can be described as a priceless bond. They, like bonds, may contain conditions for their convertibility into other securities, usually into ordinary shares.
Shares are not usually kept in the hands of the owners, even if they are issued in paper form. The right of a shareholder to a share in property was recognized as more convenient joint stock company fixed in the form of a single certificate, which indicates the name of the investor and the number of shares he owns. Such a certificate, along with data about the owner, is registered in the company's books. The process of circulation of shares is reflected in the form of redemption of certificates of previous owners and the issuance of other certificates to new shareholders. The certificate should not be confused with the share form:
The share gives its owner the right to receive a certain part of the profits of the joint-stock company in the form of dividends. Ordinary shares do not have guaranteed dividends, since all issues related to their payment are decided by the company's board of directors. He can cancel the payment of dividends, recognizing it as expedient to invest profits in production so that the joint-stock company does not finish reporting period at a loss. But this lack of common stock is compensated by a very important advantage: the ability of its owner to vote at shareholders' meetings.
Rice. 2.16. Stages of share issue by joint-stock companies in Ukraine |
More common stock in hand means more power in the company. However, in the liquidation of a joint-stock company, for example, as a result of bankruptcy, the owners of ordinary shares receive the remains of the property distributed by creditors last. The responsibility for the successful management of a business ultimately rests with its owners - the shareholders.
The most important characteristic of a stock, like any other commodity, is its price. There are several types of stock prices. The nominal value (in this case, the term "value" is traditionally used, but not in the abstract, scientific sense) is indicated on the share itself, but no value in its calculations face value does not have. It is used for accounting purposes. In some countries, such as the United States, shares may be issued without par value. In order to carry them through the accounting accounts, the so-called declared value is used, which is reflected (announced) in the prospectus.
Market value (market value) is the most important type of monetary valuation of a security, since it is it that is used when buying and selling shares. Most often, this price is defined as a base income. For example, if a share gives solid annual dividends of 100 rubles, and the loan interest rate ( for example, refinancing of the Central Bank) is equal to 12% per annum, the market value of the paper will be 500 rubles: (100 rubles x 100%) 12%. The market value of a share also depends on supply and demand, which are determined by difficultly predictable market conditions.
In addition, the market price of a share, like any other security, reflects a compromise for its owner between the risk of investing in it and the expected dividends.
Of particular note is the so-called real value of a share. It is important for an investor whose goal is to receive a dividend, and is determined based on the expected, i.e. predicted, income in the form of dividends. The investor considers such paper as interest-bearing capital. The actual value is compared with the exchange rate (market price) of the share, and as a result, a conclusion is made about the expediency of its acquisition or further ownership.
The market value of a share is the value that is formed on an organized and open stock market in a competitive environment under the influence of many macro- and micro-level factors and suits sellers and buyers of shares, the result of many transactions of independent sellers and buyers.
Market value is the amount of money for which the shares are expected to change hands as a result of a commercial transaction, on a certain date, while it is understood that each of the parties acts reasonably, has all the necessary information and without coercion.
For the formation market value shares must meet a number of conditions:
The stock market must be organized and information about the quotations and events taking place on the stock market must be available to all interested parties;
There should be many independent participants in the stock market, since a limited number of participants will most likely set manipulative prices formed under the influence of a limited number of factors;
Market participants must act without coercion, taking into account many macro- and micro-level factors;
The market infrastructure must ensure that all market participants comply with the law and accepted business practices;
Market value is:
Stocks that are actively traded on the stock market and have market quotations of professional participants stock market;
Shares with packages of which real transactions were carried out between independent buyers and sellers in a competitive and open information about bidding.
For companies whose shares are not traded or are limitedly traded on the stock market (low-liquid/illiquid), the process of formation of the value of shares differs significantly from the process of formation of the value of freely traded shares. This is due to the fact that, as a rule, information about the state of capital and financial and economic activities of such companies is closed and available only to a limited circle of people: the management of companies; strategic
shareholders owning controlling blocks of shares; to state bodies exercising control and supervision over the activities of a joint-stock company, as well as to specialized organizations, for example, banks in which accounts are opened, auditors-consultants.
Low-liquid and illiquid shares have only intrinsic (fundamental) value, which is the basis for determining the value close to the market. The internal (fundamental) value of shares is formed under the influence of internal factors of a joint-stock company: the value of assets, the current production and financial and economic state. The intrinsic value is calculated by an independent appraiser on the basis of individual knowledge, professional skills and life experience, is his expert assessment on a certain date and allows you to determine the value close to the market, the so-called recommended value. Recommended
value is a value obtained by calculation and not passed through the procedure of bidding between the buyer and the seller under conditions of competition and equal access to information, therefore it is not a market value (it is a value close to the market one) and serves as the basis for making decisions on a transaction with shares.
The following have intrinsic (fundamental) value:
Low liquid and illiquid stocks;
Shares with packages of which either no real transactions between buyers and sellers were carried out, or were carried out, but the results of the auction are not available to the general public, therefore they cannot be used as an example;
Shares whose value is determined on the basis of approaches other than market quotations or actual transactions. For example, when one of the founders leaves the CJSC, the redemption value of his share is determined not on the basis of market quotations, which are not available, but in accordance with the current legislation on the balance sheet - by the net asset method. Such a transaction cannot be considered a market transaction.
The formation of the market value of the shares of a joint-stock company (see Figure 2.17) is a process that occurs throughout the entire life cycle of a company, as a result of which the capital of any joint-stock company under the influence of various factors (see Appendix 15) changes: increases or decreases.
This is reflected in the change in stock market participants of the quoted prices for shares. Stock market participants buy and sell corporate shares only at the price they believe reflects the most accurate value at any given time. The market price of shares includes all information about events that have already occurred in the stock market, as well as information about upcoming events announced publicly or made known as a result of access to insider information.
 Rice. 2.17. Formation of the value of shares |
It is necessary to pay attention to the fact that shares are not only investment asset, but as a title of business ownership of the capital of a joint-stock company, expressed by property and other assets, it provides shareholders-investors with certain rights, the presence of which allows the owner of shares not only to manage the activities of a joint-stock company, but also to receive part of the profit in the form dividend payments(see § 2.3). Thus, on the one hand, company shares are of interest to investors as a form of fictitious capital joint-stock company, reflecting the market value of the entire set of property and other assets of a joint-stock company, and on the other hand, shares provide their owners with certain rights. A list of these fundamental rights is presented in Appendix 14.
Summing up, we can say that the market value of shares Russian companies- this is the price parity between sellers and buyers of shares, with the upper limit of the value determined and formed by macro-level factors characterizing the financial and economic situation in the country, and the lower limit of the value of shares is formed by the value of assets, financial and economic situation and business development prospects of the joint-stock company, adjusted by microlevel factors. A visual representation of this process is shown in Fig. 2.18.
 Rice. 2.18. Formation of the value of shares of domestic joint-stock companies |
More on the issue and the formation of the value of shares.:
- 2.3. FORMATION AND INCREASE OF OWN CAPITAL IN THE PROCESS OF ESTABLISHING A BANK AND EXPANDING ACTIVITIES
- A share as a document certifying the existence of a joint-stock legal relationship according to the liking of Russia and the USA
- Copyright - Advocacy - Administrative law - Administrative process - Antimonopoly and competition law - Arbitration (economic) process - Audit - Banking system - Banking law - Business - Accounting - Property law - State law and management - Civil law and procedure -
Today, investing in securities, in particular stocks large companies and corporations, remains one of the most profitable methods of earning Money. Yes, today investment opportunities are also represented by the industry, but investments in this area are associated with much greater risks, due to weak, or rather, absent security.
While stocks, being a classic tool for increasing capital, carry serious tangible assets, which, in general, form the price of these same shares. Let's take a closer look at this very interesting question.
What are shares?
Shares are documentary evidence of the ownership of the shareholder of the paper authorized capital a certain company or firm - the issuer. The issuer is called individual that released the Central Bank to the market.
The issuer does this to increase the capital of its production facility or services, in general, a business. The investor, on the other hand, does his business by buying up securities, receiving dividends on them, or selling them after the potential growth of quotations visible to the investor runs out.
There are differences in investors regarding this type of securities. Some buy reliable shares and hold them for a long time to receive dividends, sometimes passing them on to their children. Others buy solely for the purpose of selling and profiting from it. This technique is called speculation. Despite the negative reputation and criticism, speculation on stock exchange very profitable, if you have the proper skills and information content.
Characters
Today, the securities market is very diverse in its choice. Here you can buy tech stocks like Amazon, VKontakte and Samsung, or more conservative stocks like energy or heavy industry stocks such as Gazprom, Polyus, Norilsk Nickel, MMC, as well as small shares of the central telegraph office or the main pharmacy in your city.
In Russia, the main trading takes place on the Moscow Exchange (MICEX). The Moscow Exchange is not only a room and a building for conducting trading operations, but also entity monitoring the fulfillment of obligations and the procedure for conducting transactions.
All active persons of the trades are obliged to obey the charter of the exchange as well as state legal acts on the regulation of transactions. Also, everyone pays taxes. Individuals do not have the right to trade on their own, so they use the services of brokers.
Brokers and managers
Brokers are licensed intermediaries fulfilling obligations to their clients to purchase those assets that they specify. Or the broker can take over trust management securities - to independently decide what to buy and when to sell. All this is done without the participation of the investor.
The purpose of such a mechanism, of course, is to make a profit. The only difference is that in such a situation, the depositor is not required to independently perform all operations and generally take care of at least something. Right choice a trust manager, that is, a trustee with your assets on the stock exchange - this is the main business of those who decide to resort to this method of earning.
Payment for the services of a broker and a manager can be carried out in different ways, but most often, the broker takes his small (0.2 - 0.5) percentage of the amount of each transaction. The trustee, on the other hand, receives a larger percentage, in the region of 3-5%, but only upon the fact of the successful completion of operations and profit.
Share price formation
The share price is sum of money paid by the buyer to the seller for each security included in the package of securities. It is the price for 1 share that forms its quotes. For the Russian exchange, the price is indicated in rubles per 1 paper, for the American one, respectively, in dollars. Also, the US dollar is distributed on almost all exchanges of an international nature, with the exception of European exchanges, where transactions are made in euros.
The price per share is formed from the activities of the company - the issuer. That is why this type of securities is considered more predictable and understandable than the same cryptocurrencies, the price of which is formed only from the market situation.
Good performance in the company's performance, its achievements in the field of production, cost reduction, expansion branch network and marketing, the general market situation around it is formed. Positive numbers increase the value of the stock.
A bit of Buffetology
It is worth noting the trend that corporations that do not pay dividends bring more income to their shareholders in the long run. This opinion is shared by the famous "Oracle of Omaha", Warren Buffett. The popular book Buffettology explains this trend.
We are talking about the fact that companies that do not pay dividends, but invest them in themselves, grow much faster than similar companies with regular payments. According to Warren's observations, despite the absence of dividends, this model is more profitable for the holder. The paradox is deciphered in the moment that dividends imply the payment of taxes and when refinancing, that is, returning the money back to the issuer's Central Bank, a smaller amount is already included.
But companies that capitalize on their own grow quite quickly, as newly invested funds are fully protected from taxes. For the investor, the profit lies precisely in accelerating the growth of the company according to the principle of compound interest, that is, the subsequent sale of shares will take place according to higher price, thereby compensating at times for the lack of dividends.
How to find out the true value of the company, what valuation method to use? Which calculation method can be used to obtain the most accurate company value? Those wishing to receive unambiguous answers to these questions I want to immediately disappoint - there is no unambiguous answer to these questions. The choice of the valuation method depends on the goals of the valuation and on the end user of its results, and the estimated (estimated) cost cannot be correct or incorrect, accurate or not accurate - it can be reasonable and unreasonable.
All valuation methods can be divided into 3 groups - profitable, market and cost. Let's take a look at what these methods are.
INCOME APPROACH
This is perhaps one of the most common approaches. It includes two main methods:
1.
2. Future income capitalization method.
Method of discounting future income is based on one of the axioms of economics - the current value of the enterprise is determined by future cash receipts, given (discounted) to date. As an income, it is better to use cash flow (CF), or simply net income (NP) (balance sheet income minus tax and dividends on preferred shares).
DP \u003d CHP + A - OK - KV, (1)
DP - cash flow
PE - net profit
A - depreciation
OK - increase in working capital (calculated as the difference at the end and beginning of the period)
KV - capital investments.
The formula for calculating the value of a company is as follows:
Vcalc. = DP1/(1+r)+ DP2/(1+r2) + ... DPn/(1+rn)+ Vres. /(1+rn) (2),
V calc. - the estimated value of the company,
r is the discount rate,
n is the number of forecasting periods (usually a year),
Vost. - the value of the company in the post-forecast period.
Vost. = DPn (1+g)/(r-g) , (3),
g is the company's growth rate (income growth rate).
The main steps in using the method are:
Calculation of DP for each forecast period;
Choice of discount rate;
Determination of income in the post-forecast period;
Calculation of the current value of the company.
The most important and most time-consuming process in applying the method is, of course, the forecast cash flows. This process itself is divided into several stages and involves the forecast of a number of factors - income, expenses, investments, etc.
Obviously, the longer the forecast period (n), the more likely the error.
The forecast period should not be taken longer than 5 years, since this significantly reduces the accuracy of forecasts. Moreover, I would recommend limiting yourself to 3 years and then using the company's growth rate factor (g). Of course, this advice is unacceptable if the valuation of the company is for strategic purposes.
However, even with a forecast period of 3 years, the probability of a deviation of the real value from the predicted value is very high, therefore it is more correct to make three forecast options: pessimistic, most realistic and optimistic (this rule can also be applied to other methods).
The calculation of the discount rate should be based on the applicable income stream. If used as income net profit you need to use the following formula:
R = (PE(1+g)/ Po) + g, (4)
Ro - current capitalization,
g is the profit growth rate.
If the valuation is carried out on the basis of DP, then the discount rate should be calculated using the capital asset valuation model.
R= Rf + b (Rm - Rf) (5)
Rf is the risk-free rate of return,
Rm is the average market rate of return,
b is the coefficient of systematic risk.
In this formula, difficulties may arise in determining the coefficient b. It can be defined in two ways − statistical and fundamental.
The first one can be used when there is a good market history and the stock itself is highly liquid. In Russia, Moenergo, Lukoil, RAO UES and a number of other companies can be considered such securities. Statistical b evaluates the change in the returns of the shares of individual companies in comparison with the change in the returns of the stock index. When calculating and applying this method of calculating the coefficient, it is necessary to consider its stability over time (see RZB No. 9, where the instability of the statistical b in time for Russian enterprises).
If the shares are illiquid, or b unstable in time, it is better to apply the fundamental method of calculation. It is based on the results of the analysis of those variables that can affect the financial condition of the company. Moreover, when calculating the coefficient, it is necessary to take into account not only the state of the enterprise, but also external factors (industry, macroeconomic).
R = SK*DSK+DZ*SDZ (6)
SC - share of equity,
DSC - rate of return on equity (you can use ROE),
DZ - the share of long-term debt,
SDZ - the cost of long-term debt for the company.
This method is rarely used to quickly assess the growth prospects of stocks, since it is quite laborious, takes a lot of time and requires a lot of hard-to-find information. However, it can be used for some strategic purposes (for example, in preparation for the launch of shares on the market).
Capitalization method, as a rule, is used to evaluate companies with a fairly well-established income structure or with well-predictable growth rates of these incomes.
At first glance, the capitalization method is much simpler than the discount method. The method is based on the use of actually two variables, one of which is the potential income, the other is the corresponding capitalization ratio or multiplier. The method is expressed by one formula:
Vcalc.= D*K, (6)
D - income,
K is the capitalization ratio.
To calculate income, a wide variety of quantities can be taken - PE, dividends, DP (see Income Approach). An alternative to income (when applying this method) can also serve as revenue, or physical volumes and capacities (oil reserves, installed capacities, tons of steel, etc.). All these alternatives involve their possible translation into a specific income (profit, dividend, DP).
All these methods have the right to life, and it is necessary to approach each group of enterprises individually. In addition, nothing prevents the calculation of the cost of all types of income and their alternatives. The use of the NP indicator as a capitalized value (balance sheet profit minus tax) is the most economically correct. The capitalization of dividends is still more of a theoretical value.
However, the Russian reality is such that sales revenue is most often used. In today's conditions, this is perhaps the most universal and most accessible indicator, and it allows you to compare enterprises in various sectors of the national economy.
In terms of the timing of receipt, incomes can also be very diverse - an indicator of the past period, a weighted average for several years, a forecast value for the next year, etc. The choice of calculation depends entirely on the amount of data and its interpretation by the analyst.
The theory recommends taking a retrospective period of 5 years to determine the company's income. However, the analyst should not get hung up on this value and should pay attention to individual conditions (duration of the business cycle, the current situation when the company has achieved the most stable results). This advice is all the more relevant in the current environment, when it is practically impossible to collect data for such a period of time and in practice it is usually possible to use materials for a maximum of 3 years.
The capitalization ratio (K) refers to the multiplier used to convert the amount of income to the estimated value.
The definition of K can be approached in two ways:
1. As K, you can take multiples for comparable companies. This method is easier to use (unless, of course, there is a certain database of comparable companies), and, as a rule, it is the one that is used in practice, giving quite acceptable results. When determining the appropriate multiplier, it must be remembered that the calculation base must be the same for all comparable companies (i.e., different profit values calculated differently, etc. cannot be taken), and the price is as close as possible in terms to the valuation date.
However, there are often situations when it is impossible to collect the appropriate bases for calculating the multiplier, or such data are simply not available. In this case, you can apply the second method of calculating the capitalization ratio.
2. K=1/(r-g). In this case, the analyst will face difficulties in determining the discount rate r (see above) and the company's growth rate g. The method is quite complex, but its use is justified when a detailed study of the company has been carried out or when these components (r, g) have already been determined (for example, when a discounted cash flow valuation has already been carried out).
When applying this calculation method, only PV or revenue can be used as income (in this case, the result must be adjusted for business efficiency).
It is easy to see that the value of (r-g) should be inversely P/E. Ideally, this should be the case, since the P / E ratio essentially takes into account two variables - the discount rate r and market expectations of future earnings growth.
In principle, modern theory describes more complex formulas for the capitalization of cash flows. Their essence lies in setting different growth rates for the company at different time intervals, they are all fairly easy to derive, and a lot has been written about them in the literature, but when they are applied, a greater element of uncertainty appears.
The capitalization method is inherently very close to the market approach methods.
MARKET APPROACH. There are two main valuation methods in the market approach. capital market method and transaction method(there is also a method of industry coefficients, but I will not talk about it today). Their differences lie in the fact that in the first case, comparisons are made at the prices of individual shares, and in the second, at the prices of individual transactions (usually large blocks of shares). Accordingly, the application of these methods should be different for different cases(for example, to determine the possible price of cash auctions, where a control or close to this package is placed, it is better to use the transaction method).
Given the similarity of these two methods, I want to focus on one of them.
The capital market method is reduced to comparing the company's financial and production indicators and indicators of its market assessment (multipliers), if any, with similar indicators of comparable companies. If the multipliers cannot be calculated (for example, there is no market quote), then we calculate what price should be on the market.
Many brokers and traders manage only multipliers. On the market, you can often hear the phrase: “The cost of oil in company N is much lower than the world one ...”, or: “Capitalization per line in company N is lower than the average for the industry ...”. This approach is not comprehensive, it does not take into account the individual characteristics of the functioning of companies (risk factor). And there are already enough examples of this (for example, Lukoil's multipliers are 2-6 times larger than those of other oil companies).
For a more visual description of the method, we will show the calculation on a specific example. For the calculation, a group of communications enterprises with an installed capacity of 300 to 500 thousand numbers was taken. Capitalization is calculated only for OJSC as of October 10, 1997. The initial data for the calculation are summarized in Table 1.
To calculate the total risk P, you first need to calculate the risk for each individual indicator (P), and then the total risk. The calculation results are in Table 2.
The formula for calculating R (risk for each indicator) is as follows:
if P> Psr, then 1+ (P - Psr) / (Pmax - Psr) (8)
P< Пср, то 1-(Пср- П)/(Пср - Пмin)
To calculate the overall risk indicator (R), you can take either just the arithmetic mean R or a weighted one (depending on which indicator the investor considers the most significant). The calculation of weights is a topic for a separate article and we do not touch it. In our example, the calculation (P) was carried out as a simple arithmetic mean.
Having calculated the risks, you can begin to determine the calculated values of the multipliers (M), and then to determine the estimated share price. Calculation results in Table 3.
The formula for calculating M is as follows:
if Р>1, then М = Мср + (Мmax - Мср)(Р-1) (9)
R<1, то М = Мср - (Мср – Мmin)(1-Р)
Estimated share prices are determined based on the calculated M, which we receive for each multiplier. Further, everything can be brought to some one price, here, as well as when calculating risks, you can set different weights depending on the significance of a particular multiplier for the investor.
For the successful application of the method, it is important to perform three main steps:
1. Select a group of comparable companies
2. Collect the necessary information (everyone decides how he can).
3. Select comparison indicators and make calculations
Comparability criteria can be: industry affiliation, product range, size of enterprises (in terms of sales, assets, headcount, etc.). For example, it is not enough to take and compare simply all communications enterprises. It will be correct to break them down into GTS, MMT, etc., then by size, i.e. You can't compare MGTS and Yamalelectrosvyaz.
An example of comparable companies in Russia can be communications and energy companies of approximately equal size (in terms of installed capacity and installed capacity), tire plants, and MK with a full cycle. Some Russian enterprises can already be compared with foreign ones (in this case, it is necessary to introduce a country-specific correction).
Another very important point in the application of the method is the choice of comparison indicators. In an investment company, a bank, they should depend on the company's policy and its priorities in making investment decisions. In principle, you can try to calculate the indicators for the average investor (however, this is quite laborious work and, as a rule, it does not justify the effort invested).
The number of indicators and their type is completely at the mercy of the analyst, and here you can give free rein to all your imagination. However, I would like to warn specialists against excessive zeal in this matter and give some practical advice.
It is not necessary that all indicators be available for each enterprise, and therefore it is not necessary to exclude enterprises for which there are no data from the calculation. It is also not worth wasting time and money to get these indicators somewhere. If these figures are available for other companies, then the result will be quite acceptable.
It is not necessary to display all known financial ratios. It is enough to use 5-6, or even limit yourself to 2-3.
On the other hand, it is worth introducing indicators that are rather difficult to unambiguously determine: for example, the attitude towards shareholders, the liquidity of shares, the conditions for registering property rights. However, when entering such indicators, another problem arises - is a single algorithm for their calculation necessary, or is it quite enough to set them by expert means (here everyone decides in his own way, but there is nothing wrong with using an expert opinion, it is not at all necessary to mathematize everything).
This group of methods is good because it allows you to approach the assessment not only from a theoretical point of view, but also from the point of view of the market (this is already evident from the name itself), while using a whole range of very different indicators, not only economic, but also production .
In addition, if a number of conditions are met (for example, automatic updating of information), the process can be fully automated, which allows you to quickly evaluate a large number of enterprises, taking into account new data.
The application of the considered method makes it possible to formalize the concepts of "risk" and "return" (the latter can be taken as growth potential), which, in turn, will allow choosing an effective set for forming the portfolio structure.
The main disadvantage of the method is the need to maintain and update a large database and the same approach to all enterprises.
COST APPROACH
This group of methods is based on the assessment of the enterprise through its assets. The market value of assets is estimated, debts are deducted, or the costs of creating such a company are considered. In our case (for our purposes) it is not actually applicable, since a lot of preparatory work and a large staff of appraisers are required for its correct use.
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Minasov Oleg Yurievich. Formation of the market value of shares of Russian enterprises: Dis. ... cand. economy Sciences: 08.00.10: Moscow, 2002 197 p. RSL OD, 61:03-8/1024-3
Introduction
CHAPTER 1. THEORETICAL ASPECTS OF FORMING THE MARKET VALUE OF SHARES 10
1.1 Approaches to the formation of the market value of shares 15
1.2 The main factors influencing the formation of market value ^ n
shares of Russian and foreign enterprises: identification of features
CHAPTER 2. ANALYSIS OF THE INFLUENCE OF MACRO-LEVEL FACTORS ON THE FORMATION OF THE MARKET VALUE OF RUSSIAN SHARES 30
2.1 Analysis of the influence of factors of the socio-economic situation of the country on the formation of the market value of shares 30
2.2 Analysis of the influence of the industry attractiveness factor on the formation of the market value of shares 46
CHAPTER 3. ANALYSIS OF THE INFLUENCE OF MICRO-LEVEL FACTORS ON THE FORMATION OF THE MARKET VALUE OF SHARES OF RUSSIAN ENTERPRISES 65
3.1 Analysis of the impact of the state and development of the business of the issuing company 65
3.2 Analysis of the impact of individual characteristics of shares: 74
3.2.1 Impact of share capital distribution: (open/closed) companies75
3.2.2 The influence of the shareholding size and its control
3.2.3 Influence of the state as a shareholder 99
3.2.4 Impact of violation (non-observance) of the rights of shareholders-investors
3.2.5 Effect of the type of shares (common or preferred)
3.2.6 Effect of liquidity of shares/blocks of shares
CHAPTER 4
4.1 Methodology for determining the market value of illiquid and low-liquid shares
4.2 Managing the market value of shares 138
CONCLUSION 152
REFERENCES 157
APPS 167
Introduction to work
An increasing number of participants are involved in the process of international capital integration. The Russian stock market is currently being formed, the formation of which is associated with a choice of priorities in favor of Russian or foreign capital, protection from financial crises and overcoming their consequences, developing practical advice for market management.
The formation of the stock market in Russia has led to the emergence of a new sector of the economy, a regulatory and service infrastructure, a class of owners, and also necessitated the solution of such problems as: improvement of the legislative framework; choice in favor of Russian or foreign capital; protection from financial crises and overcoming their consequences.
The solution of these problems raises a number of questions for modern researchers, the main of which is: “How is the market value of shares of Russian enterprises formed?”. The dissertation sees the answer to this question in assessing the qualitative and quantitative impact of macro- and micro-level factors, industry specifics, features of the current legislation, as well as in developing methodological approaches for determining and managing the market value of shares.
Relevance of the research topic. The relevance of the research topic is due to the increased interest of Russian and foreign investors, as well as shareholders-owners to the process of formation, determination and management of the market value of shares of enterprises. The low capitalization and insufficient liquidity of the shares of most Russian companies necessitates a detailed consideration of this issue, its theoretical study and systematization of statistical data. The lack of understanding by the majority of issuers of the need for the process of managing the market value of shares, as well as ignorance of the factors influencing it and the results to which they lead, give the author grounds to conduct a study on the topic of this dissertation.
Currently, the process of managing the value of shares is not widely used in the practice of issuing companies. This leads to a distortion of the value of shares, creating the possibility of abuse during the transfer of ownership rights to them, infringement of the legitimate rights and interests of shareholders-investors. Under these conditions, managing the market value of shares and identifying factors influencing its formation is the main task in the process of establishing an effective share market as a tool to attract investment resources in real sector economy.
The lack of effective management methods and insufficient coverage in the literature of the mechanisms of formation of the market value of shares determine the relevance of these issues for Russian economy and, accordingly, the choice of the topic and the main directions of the dissertation research.
Purpose and objectives of the study. The purpose of the dissertation is to solve the scientific problem of determining and managing the market value of illiquid and low-liquid shares based on a qualitative and quantitative assessment of macro- and micro-level factors that influence its formation. In accordance with this goal, the following tasks are set:
To analyze the investment attractiveness of Russia in comparison with developed and developing countries, as well as investment attractiveness Russian industries National economy;
Conduct an analysis Russian market shares and develop recommendations for increasing their value (capitalization), based on stimulating the growth of the market value of shares;
Assess the influence of micro-level factors (the state of the enterprise's business; conditions for the distribution of equity capital; the size and liquidity of a block of shares; violation of the legitimate rights and interests of shareholders, etc.) and identify the main problems in the formation of the market value of illiquid and low-liquid shares of Russian enterprises;
Conduct an analysis of the main approaches and methods used in determining the market value of shares and identify the features of their application.
Develop a methodology for determining and managing the market (closest to the market) value of illiquid and low-liquid shares of Russian enterprises;
Theoretical base of the research. The study used the works of foreign economists who contributed to the study of stock markets, transition economies and functioning national companies. The main ones are: Richard J. Thewles, Edward S. Bradley, Tom Copeland, Tim Koller, Jack Murrin, Sidney Cottle, Roger F. Murray, Frank E. Block, George Soros, Cheng F. Lee, Joseph E. Finnerty , Robert Ling, Shannon P. Pratt et al.
Most of them conduct a study of the market value of shares on the example of countries with developed stock markets. The Russian stock market is developing and has many features that must be taken into account when considering the formation of the market value of shares.
The dissertation also used the works of Russian economists specializing in the study of the domestic stock market, the stock and bond market, financial and credit institutions, Russian enterprises and financial and industrial groups, national legislation and the system of regulation of stock market participants: Alekseeva M.Yu., Belyaeva I.Yu., Berzona N.I., Bulycheva G.V., Gryaznova A.G., Lavrushina O.I., Mirkina Ya.M., Rubtsova B.B., Semenkova E.V., Tazihina T. V., Feldman A.B., Fedotova M.A., Eskindarova M.A.
Information base of the study. Information base for
The conducted research was based on the open data of RTS, MICEX, MFB, published on the websites: www.rts.ru; www.mse-dsu.ru; www.micex.com the official information bulletin of the Russian Foundation for Basic Research "Reforma" for 1996-2000; statistical collection of the State Statistics Committee of Russia; periodicals. In addition, the dissertation student used the practical knowledge gained in the audit consulting company UNIKON/MS Consulting Group CJSC in the process of working with such enterprises as: JSC Tyumen Oil Company; OAO NK Rosneft; JSC NGK Slavneft; OJSC "Bashneft"; OJSC "Salavatnefteorgsintez"; JSC AVTOVAZ; OJSC Kama Pulp and Paper Mill; JSC "Krassugol"; OAO Vostsibugol; JSC "Moscow Tire Plant"; OAO "KomiTEK", OAO "LUKOIL" and others.
Object and subject of research. The subject of research in the work is the process of formation of the market (closest to the market) value of illiquid and low-liquid shares of Russian enterprises.
The object of the study is the main macro- and micro-level factors that influence the formation of the market value of illiquid and low-liquid shares of Russian enterprises. External and internal Russian factors were considered, a qualitative and quantification factors in the system of relations between market participants (state authorities, professional members market, issuing companies, shareholders-investors) taking into account the peculiarities of the infrastructure of the Russian market: legislative, informational, regulatory and control.
Methodological basis of the study. Methodological basis dissertations constitute the fundamental provisions modern theory functioning of capital markets, organization of joint-stock companies, business development, determination and management of the market value of shares.
The work applied a systematic approach based on a combination of macro- and microeconomic analysis. Finding quantitative parameters was achieved by methods of statistical analysis, as well as on the basis of peer review based on the practical experience of the author.
The scientific novelty of the dissertation lies in the development of a methodology for determining and managing the market value of illiquid and low-liquid shares of Russian enterprises and offering recommendations for increasing their capitalization. In the course of the study, the following results were obtained:
1. The influence of the main macro- and micro-factors on the formation of the market value of illiquid and low-liquid shares of Russian enterprises has been established. The result of these studies was the definition:
the qualitative influence of factors of country and industry attractiveness on the market value of illiquid and low-liquid shares of Russian companies;
qualitative and quantitative impact of micro-level factors (state of the issuer's business, distribution of share capital; size, liquidity and controllability1 of a block of shares; violation of the legitimate rights and interests of shareholders, etc., etc.) on the market value of shares;
the average value of the premium (discount) for the control and minority nature of the blocks of shares of enterprises sold by RFBR at auction in accordance with the privatization plan for the period 1996-2000;
1. The systematization of Russian industries in terms of investment attractiveness has been carried out both from the standpoint of profitability and from the standpoint of their development prospects for the domestic economic complex.
2. A classification of the distribution of the share capital of enterprises has been developed. The influence of shareholders (groups of shareholders) on the financial and economic activities of enterprises, depending on the size of their block of shares, has been established.
3. Systematization and Comparative characteristics existing approaches and methods used in determining the market value of shares, the features of their application in modern conditions are revealed.
4. A methodology has been developed for determining and managing the market value of illiquid and low-liquid shares of Russian enterprises.
The practical significance of the dissertation lies in the fact that the main conclusions and the results obtained are focused on widespread use in practice of determining and managing the market value of illiquid and low-liquid shares of Russian enterprises, which is necessary when:
Purchase and sale of shares of enterprises;
Acceptance of investment and management decisions in companies;
Carrying out restructuring of joint-stock companies;
Formation of stock portfolios in investment and pension funds; insurance companies, commercial banks;
Carrying out activities of anti-crisis management of companies;
Lending secured by blocks of shares;
Systematization of the methods used to determine and manage the value of shares;
In addition, the developed methodology for determining the market (closest to the market) value of illiquid and low-liquid shares of Russian enterprises, as well as recommendations for managing the value of shares can be used in programs to increase capitalization and manage the value of shares of large companies, in programs for managing the stock market, as well as in the development of measures to prevent possible crises in the stock market.
The main provisions of the dissertation and the results obtained in the work can be used in the practice of financial, investment, appraisal, audit and consulting companies, as well as in the educational process when teaching the following disciplines: Professional activity in the securities market”, “State in the securities market”, “Securities market and exchange business”, “Business valuation”, “Anti-crisis management”.
Approbation of the research results. The results obtained, the main conclusions and recommendations were accepted for use in practice in the process of implementing projects related to business valuation, determining the market value of shares of Russian companies, corporate governance and financial consulting in the audit and consulting company ZAO UNIKON/MS Consulting Group. The main provisions of the dissertation work are published in the following articles:
Minasov O.Yu. Factors affecting the market value of shares of Russian enterprises // Moscow appraiser, 2001, No. 4.
Minasov O.Yu. Industry attractiveness of Russian companies // Digest Finance, 2001, No. 8.
Minasov O.Yu. Management of the market value of shares // Digest Finance,
Minasov O.Yu. Stock Market Dynamics: Factor Analysis // Finance,
Minasov O.Yu. Aspects of improving the state financial control in Russia // Economic, legal and spiritual culture of Russia at the turn of the millennium: Nauchn.-prakt. Conf., held by the Humanitarian University (Ekaterinburg) May 20-21, 1999: Proceedings. dokl./ Editorial: L.A. Zaks et al.: In 3 volumes - Ekaterinburg: University of the Humanities. Vol. 2: Crisis and development of the Russian economy (problems and prospects).
Approaches to the formation of the market value of shares
The formation of the market value of the shares of enterprises is a process that occurs throughout the entire period of existence and operation of the enterprise. Throughout the life cycle of a joint-stock company, there is a continuous process of forming the value of its shares, as a result of which the capital of any enterprise changes: it increases or decreases under the influence of various macro- and micro-level factors. Shareholders - owners of shares and investors - potential shareholders constantly monitor changes in the state, structure and value of the capital of enterprises. In addition, shareholders and investors track changes in many macro-level factors. Identified by the participants of the stock market (shareholders, investors, representatives of the market infrastructure and other stakeholders) changes (positive and negative) of macro- and micro-level factors form at each moment of time their idea of the fair market value of the shares of enterprises they monitor. This is reflected in the change in stock market participants of the quoted prices for shares. Participants in the stock market buy and sell shares of enterprises only at the price that, in their opinion, reflects the most accurate value at any given time. In the indicated share price, market participants include all information about events that have already occurred on the market, as well as information about upcoming events that have been publicly announced or become known to them as a result of access to insider information.
The multitude of opinions of market participants on the value of the shares of a particular company ensures the emergence of a price corridor formed from bid and offer prices for shares. The indicated price corridor reflects the opinion of many market participants about the fair market value of the shares of a particular company. Note that in order to form a fair market value of shares, a number of conditions must be met:
the stock market must be organized and information about the quotations and events taking place on the market must be available to all interested parties;
there should be many independent participants in the stock market, since a limited number of participants will most likely set manipulative prices formed under the influence of a limited number of factors;
market participants must act without coercion, taking into account many macro- and micro-level factors;
the market infrastructure should ensure that all market participants comply with the law and accepted business practices;
For companies whose shares are not traded or have limited circulation on the market, the process of formation of the value of shares is significantly different from the process of formation of the value of publicly traded shares. This is due to the fact that, as a rule, information about the state of capital and financial and economic activities of such companies is closed to the mass investor and is available only to a limited circle of people: company management; strategic shareholders owning controlling stakes; state bodies exercising control and supervision over the activities of enterprises; as well as specialized organizations, for example, banks in which accounts are opened; auditors and consultants. The value of the shares of such companies is also formed under the influence of macro- and micro-level factors, however, due to the fact that information about the state of the business of these companies is not public, shareholders and investors overlook many factors. This circumstance does not allow them to quickly (at any given time) have information about fair value shares in accordance with
Analysis of the influence of factors of the socio-economic situation of the country on the formation of the market value of shares
Analysis of the relationship between the dynamics of the share price and the dynamics of the gross domestic product (an indicator of the general economic situation); between the dynamics of the share price and the dynamics of the net profit of companies (a generalizing indicator of the effectiveness of its functioning) does not give an unambiguous answer about the existence of a directly proportional relationship between the dynamics of share prices and indicators of the development of the economy, industry, company. This dependence is much more complicated: investors' expectations are based on the prospects for the development of the country, industry, company, as well as minimizing various risks. The diverging expectations of certain groups of investors provide volatility in expectations, although the direction general trend the stock market coincides with the direction of industry and country development trends.
Main macroeconomic indicators, which characterize the state and forecasts of the development of the Russian economy, strongly influence the formation of the market value of shares. First of all, they are based on GDP, as well as indicators that supplement it: data on budget execution and its structure, on the development of economic sectors, on the number and employment of the population, on the analysis consumer market, about foreign exchange market, about price indices, inflation rates, the level of external and domestic debt, movement foreign investment and etc.
Along with economic political factors also have a significant impact. The most important political factor is the policy pursued by the President of the country and the Cabinet of Ministers. The messages of the President and the Cabinet of Ministers are not “taken into account” by the stock market in advance and are of great importance, as they contain recommendations, for example, regarding new taxes, measures to influence economic development country, public spending and budget, policy in the field public sector economy, defense spending programs, etc.
Elections, political assassinations and the deteriorating health of the President can have a very strong “bearish” influence on the market.
Therefore, stock market participants should always pay due attention to economic and political events, assessing their impact on the stock market as a whole and on the market value of individual shares.
The cumulative influence of macro-level factors causes a change in the investment attractiveness of Russia, the Russian stock market and the market value of shares of national companies. Investment attractiveness- this is a summary indicator calculated on the basis of economic, political, organizational, legal and socio-cultural prerequisites that determine the attractiveness and expediency of investing in a particular economic system (country, region, company).
An integrated assessment of the factors of the socio-economic situation of any country is reflected in the credit ratings assigned by international rating agencies, such as Moody's. The analysis of the dependence of the P/E and P/BV ratios on credit ratings countries with emerging stock markets shows that:
Figures 4 and 5 show this relationship. The curves, which are averages for emerging stock markets, have a pronounced slope that confirms the findings.
Analysis of the impact of the state and development of the business of the issuing company
The main micro-level factor influencing the formation of the market value of shares is the financial and economic state and prospects for the development of the company's business. The prospects for the business of any company determine the mood of stock market participants who are ready to purchase shares. If the issuer's business develops unsatisfactorily and does not meet their expectations, then, accordingly, the demand for shares as an investment asset will be minimal, and stock quotes will not only not increase, but may fall. If the company is doing well, the demand for its shares will increase and the value of the shares will increase. However, such, at first glance, predictable behavior of stock prices in most cases is not confirmed in practice. This is due to the untimely receipt of information on the activities of companies on the market.
The economic condition and prospects for the development of the companies' business can be described using the indicators presented in Table 14. Note that the listed indicators are common to all companies. For a particular company, it is necessary to take into account specific indicators. For example, indicators for individual enterprises of a vertically integrated oil company(extraction, processing, sale) are presented in Appendix 3.
The organizational structure of the company's management includes:
a management structure that defines the hierarchy of subordination and official responsibility of internal divisions and employees of the company;
qualifications and job compliance of the company's employees with the requirements set by the owner, business and working conditions:
document management system covering accounting, tax, managerial and financial accounting;
a systematized database on the financial, economic and production activities of the company for previous reporting periods;
Practice shows that the organizational structure of management has an impact on the formation of the market value of shares - due to an incorrect management structure, companies can lose their income:
incorrectly organized document flow does not allow middle and top management to quickly receive information about the state of the business and, accordingly, make tactical and strategic decisions in a timely manner;
an incorrect management structure allows different departments to duplicate functions, perform unnecessary work, which makes management ineffective and leads to additional costs;
the lack of a clearly defined set of functions, powers and responsibilities, both for structural units and for officials, does not allow delegating powers, closing the solution of most issues to top management, diverting its attention from solving strategic tasks, which leads to lost profits.
The lack of a clear organizational management structure negatively affects the financial and economic performance: overall competitiveness decreases, the company's business efficiency decreases and, as a result, the demand for shares decreases, which leads to a drop in their market value.
Despite the fact that the issue of completeness and correctness of the organizational structure of the company's management is important in business management, nevertheless, it has a minimal impact on the formation of the market value of shares. The reason for this is that the owner of the company can effectively reform the management structure within a short period of time and at minimal cost. Shareholders, as well as potential investors - participants of the stock market are well aware of this, and, as a rule, assess the impact of this factor to a minimum. Business losses from a poorly organized management structure are mainly reduced to lost profits, which are almost impossible to quantify.
The corporate structure of the company includes:
the structure of the company's share capital, revealing the distribution of shares between shareholders;
ownership structure of the company: branches and representative offices, shares in the authorized capital of subsidiaries and affiliates, long-term financial investments;
the structure of friendly organizations: entry into financial and industrial groups, holdings, affiliated companies.
The influence of the corporate structure on the formation of the market value of shares is much stronger than the factor of the organizational structure of management. This influence is enhanced when the company owns highly liquid property: long-term financial investments, participation shares, etc. Moreover, the more liquid assets a company owns, the higher the market value of its shares.
