The Analysis And Regulation On Chinese Listed Companies' "Information Circle"

The stack market is an information market. It's important for the stakeholders to get the information announced by the listed company, because they must make economic decisions according to some information. But the stock market in our country is far from strong form efficiency. There are intervals when the company's private information changes into public information. That is, there is "information circle" during the process of information transmission. "The information circle" is that the information passed from inside track to outside track along the circle which comes into being in terms of the blood relationship, the region and the benefit group. Because information can change the invest combinations and business transactions, there are lots of people who suffer losses owing to possessing or use information delalyingly, which influence not only the investors' enthusiasm but also the stabilization and prosperity of the stock market.The aim of this thesis is to prove ulteriorly the existence of "the information circle" based on empirical analysis during the process of information transmission, to analyze the cause of "the information circle", and to bring forward measures to manage the situation.First, the thesis researches the abnormal returns and abnormal trading volumes during the time before and after the companies, listed in shanghai stock exchange, announcing the annual financial reports of 2007 with event study method. Then, the thesis verifies the existence of "the information circle" during the course of the listed companies' information transmission. Empirical results show the abnormal returns and the abnormal trading volumes change significantly before and after the announcement of the annual financial reports. The thesis plots out the windows according to the change of the abnormal trading volumes. The sign test results show that there are significant differences among those windows, which proves the existence of "the information circle" too.Secondly, the thesis analyzes the causes of "the information circle" and mainly analyzes the announcing time, the announcing means of disclosed by the listed companies and the punishing degree to the deregulation companies.Finally, the thesis puts forward measures to improve the situation in terms of the analysis of the causes.