The Impact Of Analysts’ Reports On The Stock Price Under Severe Supervision

As an important member of the securities consulting industry,securities analysts publish the information contained in the research report as a guiding tool for investor transactions.A large number of investors conduct transactions based on the information in the research report,and the stock price changes accordingly.The research report will have different effects on stock prices under different market conditions.Since Liu Shiyu served as chairman of the China Securities Regulatory Commission on March 5,2016,the supervision of the stock market by the China Securities Regulatory Commission has reached an unprecedented height,which has led to major changes in the stock market environment.In the current market environment,there has been no change in the impact of the research report on stock prices.This is a question worth studying.This paper uses the event research method to empirically analyze the cumulative abnormal return on stock prices before and after the company’s in-depth report issued by the Institute of Domestic Securities Companies from November 25,2016 to September 30,2017,and explores the current A-share market analyst report for stock prices.Influences and explores the relationship between the report’s ratings,rating changes,analysts’ rankings,the reputation of the securities firm,and the size of the listed company and the cumulative excess return.The empirical results show that ratings,firm size,and reputation of the securities firm have a significant positive correlation with cumulative abnormal returns in the short-term.There is a significant positive correlation between the reputation of the securities firm and the size of the company in the long-term and the stock price.Changes in ratings and analysts are ranked in the short-term and long-term.There is no significant correlation with cumulative excess returns.This paper also compares the empirical results with the relevant literature in the past to analyze whether there is a significant difference in the impact of the analyst report on the stock’s cumulative abnormal return before and after the strict supervision of the Securities and Futures Commission.It was found that before and after strictsupervision,the short-term correlation between the rating and the cumulative excess return rate changed from a non-significant correlation to a significant positive correlation;a long-term correlation changed from a significant negative correlation to a non-significant correlation;The short-term correlation of rating changes and cumulative abnormal return becomes from a significant positive correlation to a non-significant correlation;the short-term correlation between analyst rankings and cumulative abnormal return rate changes from a positive correlation with overreaction to a non-significant correlation;There is a significant positive correlation in the short-term between securities company reputation and the cumulative excess return rate from no significant correlation,and the long-term correlation from negative correlation to positive correlation;the long-term correlation between firm size and cumulative abnormal return rate’s not significantly correlated or negative becomes significant positive correlation.After a comparative analysis,this paper believes that the measures taken by the China Securities Regulatory Commission to strengthen supervision of the stock market have had a significant impact on the market environment,making the A-share market more healthy.