Institutional Investors,Sell-Side Analysts And Investors’ Heterogeneous Beliefs

In recent years,the number of investment targets in the A-share market has increased,and institutional investors’ preferences have become more prominent,especially in the context of the current full implementation of the registration system for share issuance,the A-share market will be further stimulated and the heterogeneous beliefs of individual investors will play an important role in the changes in the share prices of listed companies.Professional buyers and sellers are important players in the capital market,typically represented by institutional investors and sell-side analysts,whose respective trading,analysis and forecasting behaviours can convey important information and signals for the majority of individual investors in the capital market.As past research has tended to focus on one of these parties,and there is a lack of comprehensive research that combines information from both,it is necessary to explore the impact of institutional investors and sell-side analysts with professional backgrounds on individual investors’ heterogeneous beliefs.In this paper,all A-share listed companies from 2012-2021 were selected as the research subjects,and the observations of 1901 listed companies were included after processing,in which the heterogeneous beliefs of the explanatory variables were measured by using the sentiment propensity of stock bar posts.It was found that:(1)the higher the level of institutional investors’ shareholding in a stock,the lower the degree of heterogeneous beliefs of investors towards that stock.(2)When a change in institutional investors’shareholding in a stock occurs,it significantly changes investors’ heterogeneous beliefs overall.Further,if such a change is caused by an increase in holdings,it decreases investors’ heterogeneous beliefs;if such a change is caused by a decrease in holdings,it increases investors’ heterogeneous beliefs.(3)Sell-side analyst attention has a superimposed effect on the relationship between changes in institutional investors’holdings and investors’ heterogeneous beliefs,significantly reducing investors’ heterogeneous beliefs.Based on the above findings,this paper proposes the following policy recommendations to build stable investor expectations and promote the stable and healthy development of the capital market: First,encourage institutional investors to increase the proportion of equity investment and hold shares steadily in the long term,raise the level of institutional investors’ shareholding among company shareholders,and stabilise investors’ expectations and confidence.Secondly,expand the team of sell-side analysts,standardise the professionalism and timeliness of research reports,give full play to their role in information mining and provide investors with more true and accurate information.