Study On Establishment And Application Of Forestry Index Of A-share Market

As soon as the currency form emerged for the first time, the price emerged. It is unable to see the variation trend of some product in the market directly, but the price index, a kind of economic index, which is indicated by relative number of the ratio of report period and base period, reflecting the change of direction, variation trend and variation degree of commodity price in different times, which can reflect the variation trend better. The price index could provide reliable basis for government's formulating economic policy, enterprise's determining on investment, production and marketing, and personal determining on getting a job and investment. Consequently, Countries begun to work out and apply price index, and consumer price index (CPI),retail price index (RPI), purchasing prices index of agricultural products, fixed assets investment price index, price indices of means of agricultural production, urban residents basic living expenses price index, commodity price index (including producer price index (PPI) and RMPPI),real estate price index, state of the housing boom index and stock price index emerged.Forestry is more and more important in the market with social progress and constant development of economy. Provided with economic benefit, ecological benefit and social benefit. Forestry is an important element of national economy, which is indispensable in preserving and improving the ecological environment, providing necessary raw material and fundamental product for the development of society and economy. Close attention is paid to forestry enterprises, as the deepening of the development of forestry industry market and the reform of forestry rights. Then, many forestry enterprises are listed on the Shenzhen Stock Exchange. To reflect the boom conditions of forestry industry and price changes of the forestry industry in the market better, and to provide basis for investors and producers'making decisions better, it is very significant to establish a single Forestry Index. This paper makes use of the Paixu formula of weighted arithmetic mean to formulate Forestry Index, and uses ARIMA model of time series analysis to model and forecast the Forestry Index. At the same time, taking the Yong'an Forestry Listed Company for example, this paper analyzes its business performance, and analyzes the relation between the Forestry Index and the business performance by correlation analysis, grey incidence degree analysis and multiple regression method. The results were as follows:1 This paper adopts the Paixu formula of weighted arithmetic mean. Make the actual equity circulation of the report period as weight and March 1, 2010 as base period to establish Forestry Day Index. In the condition of the change of samples, such as capital increasing, share capital expanding and share types increasing and decreasing, the index should be adjusted to keep the stock index comparable. The result shows that the Forestry Day Index fall and then rise in 2010, which coincided with the trend of recognized Shanghai composite index is strong positive linear correlation with a correlation coefficient 0.601,and which coincided with the trend of recognized agriculture and Forestry Index is strong positive linear correlation with a correlation coefficient 0.930. It indicates the Forestry Day Index established in this paper is scientific. Although, the Forestry Quarterly Index which coincided with the trend of recognized Shanghai composite quarterly index is not significant linear correlation with a correlation coefficient 0.349,but which coincided with the trend of recognized agriculture and Forestry Quarterly Index is greatly positive correlation with a correlation coefficient 0.950, it is indicates the Forestry Quarterly Index established in this paper is also scientific.2 The ARIMA (4,1,1)of Forestry Day Index model established by ARIMA model of time series analysis is as This model is checked out by Box-Ljung Q,which is surveyed when the lag number is a quarter of the samples. This paper's lag number is 51,the Box-Ljung Q all are not significant, their significance level are all greater than 0.05,meanwhile,the residual series is white-noise process.It is indicated that the residual series of the ARIMA (4,1,1)of Forestry Day Index model is random, using this model to predict the Forestry Day Index is appropriate, lthe error rate between predicted values and practical value is below 5%, the predicted result in some extent could represent Forestry Day Index trend.3 The increase and decrease dynamic change regulation is showed by Average quarterly total asset, average quarterly earnings per share, average quarterly net profit growth and average quarterly price earning ratio of 7 Forestry Listed Companies from 2009 to 2010. Yong'an Forestry Listed Company which is the representative of Forestry Listed Companies shows that the ratio of liquid asset and illiquid asset tends to balance, that the profitability weakened and then strengthened but the profitability was still weak, that it takes artificial board production as its primary business while forestry as secondary one and mainly faces domestic market from 2007 to 2010.4 Correlation analysis is used to analyze the relation between Yong'an Forestry Company's stock price and Forestry Day Index, the correlation coefficient is 0.926, meaning very strong and positive relationship between them, which indicates that Yong'an Forestry Listed Company has a large influence in Forestry Day Index. Correlation analysis is used to analyze the relation between the Forestry Quarterly Index and the related indictors of Yong'an Forestry Listed Company, including quarterly total asset, quarterly earnings per share, quarterly net profit growth and quarterly price earning ratio. The results show that the Forestry Quarterly Index has positive correlation with the company's quarterly total asset, but has nothing to do with the other three indicators; an regression analysis is done between the Forestry Quarterly Index and the four indicators of Yong'an Forestry Listed Company, including quarterly total asset, quarterly earnings per share, quarterly net profit growth and quarterly price earning ratio. The results also show that the Forestry Quarterly Index has significant linear relationship with the company's quarterly total asset. The regression equation is: Y = ?227 .429+0.003X1. In the equation Y indicates Forestry Quarterly Index, while X1 indicates the total assets of Yong'an Forestry Listed Company.5 Making Forestry Quarterly Index as mother sequence, making average quarterly total asset, average quarterly earnings per share, average quarterly net profit growth and average quarterly price earning ratio of 7 Forestry Listed Companies as child sequence, which analyzed by grey incidence degree analysis, the order of the relation to the Forestry Index is: firstly,the quarterly average total asset with correlation value 0.7841; secondly, the quarterly average price earning ratio (PE ratio) with correlation value 0.6435, thirdly,the quarterly net profit growth rate with correlation value 0.6633,and lastly,quarterly earnings per share with correlation value0.5917. 6 The analyze by regression analysis shows the Forestry Quarterly Index has linear relationship with the quarterly average total assets, the quarterly average net asset value per share and the growth rate of quarterly average net profit of 7 Forestry Listed Companies, the regression equation is: Y = 194. 969+0.0004X1 ?45.076X4?0.076X2. In the equation, Y indicates the Forestry Quarterly Index, X1 is the quarterly average total assets, X2 is the quarterly average net growth, X4 is the quarterly average net asset value per share. When the confidence probability is 90 percent, the Forestry Quarterly Index has significant relationships with each variable and the distribution of the standard residual is approximately normal distribution, which indicates the equation has a very high fitting precision. Knowing the relationship between the Forestry Quarterly Index and the quarterly average total assets, the quarterly average net asset value per share and the growth rate of quarterly average net profit of 7 Forestry Listed Companies, the changes of the Forestry Index could be reflected by the business performance of a company. In reverse, the increase and decrease of the Forestry Index could explain the whole management situation of a company, which is an indication of the performance of a company.