Research On Effects Of Market Makers On Stock Price Deviation Of Chinese New Third Board Listed Companies

The liquidity of listed companies on the NEEQ(National Equities Exchange and Quotations)commonly known as the new third board(an over-the-counter market for growth enterprises)has increased greatly since the beginning of trading stocks through market makers in August 2014.Makers' bilateral deals obviously improve the situation of mobility deficiency before.However,the current maker system is not very perfect.On the one hand,the competition of makers on the new third board is obviously insufficient,whether the total number or the listed company's average number of makers,the new third board's is much lower than the NASDAQ market's.On the other hand,market makers' quote behaves discontinuously and unstably from the view of successive quotation and trading.And also,the market maker's spread income is far lower than the capital gains.Therefore,it is of great significance to study the market maker system,which will be helpful to promote the healthy development of Chinese multilevel capital market.For this reason,this article attempts to explore the maker makers' effect on stock prices quoted on the new third board in a value view,through financial statement data and trading records from the listed companies.Firstly,based on the theory of price and value,market maker and price discovery,this paper analyzes the mechanism of market maker's effect on stock price deviation,and then puts forward the research hypothesis and carries on empirical test.In the empirical part,this paper chooses the enterprises that adopt the market-making transfer method by the end of 2014 on the new third board as the sample,and calculates the stock price deviation from the fourth quarter of 2014 to the second quarter of 2016.From the trend chart,corporate stock price deviation shows increase first and then drop soon.Then,according to the enterprise internal indicators and external market indicators to find out the important factors impacting stock price deviation to establish models.And this article use the panel data regression and pooled ordinary least squares estimation method to test effects of the competition degree between market makers and the makers' shareholding proportion on the stock price deviation.In the research of the makers' shares impact on stock price deviation,this paper selects those companies as the sample that makers' shares entered its top ten shareholders.Therefore,this paper needs to analyze the two variables of competition degree and shareholding ratio respectively.The conclusion shows that,the more number of makers for a listed company,the smaller of the price deviation.In other words,the stock price will deviate its value greater with fewer market makers of a listed company.At the present stage,our new third board is still short on the number of market makers,which may enhance their right of monopoly price and decrease their function of price discovery if without enough external restriction.Secondly,we find the higher proportion of shareholding for makers' special account,the bigger deviation of stock price presents.It means that makers' advantage of equity and information superiority didn't perform a good leading on value discovery,but give them potential rights on controlling price and strong motivation to achieve stock premium.Finally,based on the above research results,this paper puts forward some reasonable suggestions of the development of maker system on the new third board market.