An Empirical Research On Securities Market Volatility Influenced By Institutional Investor

During the development of securities market in China, individual investors occupied the predominant position in the early years. Because of their limited information, irrational investment decision and blind follow, securities market fluctuated acutely. After comparing with developing experience of foreign mature securities markets, in the hope of investing rationally and becoming main force to stabilize market by institution, managers try their best to develop institutional investors' troops in recent years. These troops have been rapidly developed in China since 1998, and made a positive effect in stabilizing market, advancing investment philosophy and importing the foreign technique of investment analysis etc. But because of the disobeyed conduct of securities companies and price manipulation of investment fund companies, institutional investors' function of stabilizing market is subjected to be queried again and again.In the paper, firstly, various institutional investors in China were introduced in brief. And then, herd behavior and investment philosophy were analyzed in details, which are two important fulcrums to prove whether institutional investors can stabilize market or not. The writer checked up the behaviors of securities investment fund in China and summarized the reason of herd behavior on the basis of LSV method, the famous herd behavior examination method. Compared the fund and QFII with complete fluctuation of securities market, the positive effect of changing investment philosophy was discussed in the paper. In addition, concerning development prospect of institutional investors in China, writer also stated some guesses and suggestions.The paper consists of six chapters as follows:Chapter One: Put forward the background of title selection, research significance, research object and method.Chapter Two: Briefly introduced the concept and evaluation method of securitiesmarket fluctuation, and generally analyzed fluctuation situation of securities market in China.Chapter Three: Mainly theoretic study on the influence of institutional investors' behaviors on securities market. Firstly, the development situation of institutional investors in China was related, and various institutional investors in China were introduced in details. And then, worldwide theory references on whether the institutional investors can stabilize the securities business or not were reviewed.Chapter Four: Analysis of herd behavior, the first case study on the effect of institutional investors' behaviors on securities business fluctuation. Firstly, briefly introduced the definition, examination method and previous research achievements of herd behavior. By positively inspecting securities investment fund in China, writer summarized the reason of herd behavior and presented some solutions on the basis of the two results of Whole test and Classified test.Chapter Five: Analysis of investment philosophy, the second case study on the effect of institutional investors' behaviors on securities market fluctuation. Through comparing fluctuation ratio, writer analyzed the fluctuation situation caused by institutional investors' behaviors and discussed various influence of changing investment conception from different period. Finally, QFII, the advanced investment conception, was presented in the paper.Chapter Six: Summary of the paper. Summarized the positive research achievements of two primary elements on effecting securities business fluctuation. In addition, writer expected the development foreground of institutional investors in the end of the paper.