A Study On The Accuracy Of Securities Analysts’ Forecast And The Efficiency Of The Market

According to the classic efficient market hypothesis, information in an efficient market is free to transfer, information asymmetry phenomenon will not appear in the market, and the market price will fully reflect all existing information. However, in reality there exists the information asymmetry. As the information analysist and publisher in the market, securities analysts, plays an important role in the market. This paper would like to study the Chinese securities analyst forecast accuracy of information and market efficiency, understand whether there is necessity of existence to the securities analysts industry in the market, and find the promoting mechanism of the market efficiency.Securities analysts are the information intermediary of the securities market, whether the forecast information accuracy and information with market efficiency are the problems all Chinese and foreign scholars focus on. Based on the background of China securities market, using China A-stock market data we have carried out empirical research. First of all, Chinese securities analysts’ forecast accuracy is caused by many reasons; we will divide the main reasons into objective and subjective factors. Then, we would research the market efficiency of analysts forecast information.From the objective factors point of view of the impact to the analysts’ forecast accuracy, many scholars found that the analysts’forecast accuracy was refelcted by many objective characteristics, including the analyst’s experience, the industry, and the the resources employer to give him etc. These are not easy to change characteristics reflect the overall quality of analysts and working environment, so the accuracy of the analyst forecast decision should also have strong continuity. This paper is based on the China this emerging market data proved the analyst forecast accuracy have weak continuity.From the point of view to the subjective factors, in China’s stock market, analysts expected the bold trend is expected to be more accurate than. At the same time, the profit forecast of securities analysts are optimistic tendency phenomenon.T his research found that the profit skewness of Chinese listing corporation in stock market and analysts’forcast ispositivelyrelated.Analysts predict that in time, not woul d reduce the average absolute error as the goal. That is to say, analyst with Gu and Wudoes not (2003) rational decision-making model to explain. At the same time, this paper also proves that the forecast bias and the amplitude andthe profitability of the company’s uncertainty Chinese market, when the volatility of earnings, the more big, analysts tend to have higher earnings forecasts.On the other hand, we also aimed at analysts’ forecasts of market efficiency of the empirical analysis. Bold prediction and did not because of the market to absorb informationnmore effectively.Bold prediction information contains more than the forecast. The market to digest the information efficiencydepends on the whole market environment. In view of the efficiencyof market digests the information and made no difference to the bold prediction and consensus. One possible explanation is that have the same doubts the market degree of reliability of information, whether the information is a bold prediction disclosed in the disclosure or tending to the prediction of. In addition, this paper believes that the market in the information content point of view is able to distinguish the bold prediction and trend of the forecast,the prediction and control of adjustment, the market price of a bold prediction to bring greater changes. Also explained that in the China, mediating role of securities analyst firm specific information transfer play is not effective, the information content of them is not enough. In addition, weobserve the listing Corporation stock return volatility to measure the analyst forecast information is effectively digested by the market. Conclusion the content China securities analysts forecast information is not high. Only try hard to promote the accuracy of analyst forecasts, and regulate the laws and regulations in the stock market, market efficiency to enhance analystsforecast information, so as to make it play a more effective role in the securities market, produce more meaningful work value.In a word, this paper studies the accuracy and efficiency of the market Chinasecurities analyst forecast of. Based on the empirical results and the domestic and foreign scholars, from the system of laws and regulations, self-discipline organization, market competition, individual behavior constraints to explore and alleviate the conflict of interest behind, in order to promote thesecurities analyst independent and objective forecast rating, the effects is more outstanding, and increase our market efficiency.