The Analysis Of The Chinese Capital Market's Efficiency

The capital market is at the center of the resource configuration and the core of financial market, which has great effect to the financial market. The distribution and flowing of the capital market message and clarity and uniformity of the trade are seemed as efficiency of the capital market, which is the mark of the advanced capital market. The study of capital market efficiency is meaningful to the formulating capital policy, realizing the law of capital market and perfecting the circulation of the economy. Nowadays, the studies of capital market efficiency are focused on the efficiency of the bond market message, which means how fast and how deep the message of the market responded to the price in the market. According to Fama's theory, the efficient market is divided to three kinds: weak-form market, semistrong-form market and strong-form market.Our capital market has been developing for 20 years, since its foundation in 1990. We have achieved great success although there are still deficiencies. The research on the capital market efficiency needs to be deeper, because the researchers can't agree with each other about the capital market efficiency. The verification of the capital market efficiency in our country is focused on the controversy of weak-form market and un-weakform market. The former data from other researchers supports the un-weakform market, while the data since is consistent with the infirm efficient market, which means the inhomogeneous development of the capital market. According to our research in this paper, the capital market in our country was weak-form capital market, which was more efficient than the capital market before. In this paper, we introduced event study method to discuss the warrant insurance and golden week as the given events. The results showed that our capital market has not achieved semistrong-form capital market, and there were lots to do to improve the efficiency of our capital market.The paper was divided into five parts: The theory of the capital market efficiency, the present situation of capital market in our country, empirical analysis, the reason of the capital market' inefficiency in our country.The theory of the capital market efficiency was discussed in the first part of this paper. In this part, the definition of the capital market efficiency was declared, the theories of the capital market efficiency were classified, and some important theories were discussed particularly.The present situation of capital market in our country was mentioned in the second part of this paper. In this part the research results of the capital market efficiency were summarized. Empirical analysis was used in the study of the effect on stock market of warrants issuance and golden week correspondingly in the third part and fourth part of the paper.The reason why the capital market in our country was inefficient was analyzed in the fifth part of the paper. Then, some advice was given to the improvement of the capital market in our country.