Empirical Research On Securities Analysts' Earning Forecasts In China

Along with the development of China stock market, the investors'focus turns to future information from the historical information. As the result of stock market development, securities analyst becomes the hinge between the stock market and the investors, securities analysts'earning forecast is one of the most talked about information, because it provide the expected information about listed company in future, which can help the investors, the creditor and other information users estimate the company future status, and help them make decision. So securities analysts'earning forecast is useful accounting information. Because of its important usefulness, the behavior of securities analysts'earning forecast become an important object of stock market.In foreign countries, a number of empirical studies have indicated that securities analyst can provide valuable earning forecasts. However, whether the securities analysts'earnings forecast are valuable depends on the accuracy of their earnings forecast. In China stock market, whether the securities analysts'earnings forecast is accuracy, which factors influence the accuracy of their forecasts, these are important issues to confirm the value of earnings forecast provided by securities analysts. So I finally chose these problems to study.This paper draws on the experience of both the domestic results and foreign results on the basis of the effective market hypothesis and the information asymmetrical theory, analyses the accuracy of securities analysts'earnings forecast and the influencing factors. This paper consists six chapters; the main structure and content are as follows:Chapter 1:Introduction. This chapter introduces the research background, the objective and the meaning of the research.Chapter 2:The relevant concepts and system background. Firstly, introduce the concepts of securities analysts and earning forecast. Secondly, introduce the development process of China securities analysts.Chapter 3:The related theories foundation and studying result. Firstly, introduces the correlation theory foundation, including the effective market hypothesis and the information asymmetrical theory. Secondly, reviews the studying results from both domestic researchers and foreign researchers, and explains why so few articles about the positive study about securities analysts' earnings forecast in China.Chapter 4:Statistical analysis of the accuracy of securities analysts' earnings forecast. Using the data of China A listed companies 2006-2008 year from CSMAR Database, analyses the accuracy of securities analysts'earnings forecast. This study finds that the accuracy of securities analysts'earnings forecast is quite high in 2006 and 2007 year, shows that the forecast information is useful for investors. But it's not very high in 2008, indicates that our countries'securities analysts' forecast ability is not stable and is easily influenced by economic environment. This study also shows that our countries' securities analysts' forecast is optimistic. The main reason is they want to increase their brokerage business.Chapter 5:The empirical study of the influencing factors to the accuracy of securities analysts'earnings forecast. This study finds that the proportion of institutional investors holding has little influence to forecast accuracy, the predictability of earnings, earnings volatility has the reverse co relational dependence on forecast accuracy, the forecast accuracy is positively associated with the quality of information disclosure and number of forecasters.Chapter 6:Conclusion. Based on above research, this chapter draws the conclusion and gives some advice to raise the accuracy of securities analysts' earnings forecast.The main contribution lies in:(1) This study stands from the sell-side analyst, using securities analysts' earning forecasts for listed A-share in China provided by CSMAR database, differentiates horizons and uses the median as the consensus forecast of analyst, analyses its accuracy and influencing factors. These conclusions could help investors to make investment decisions. Since there are so few articles about securities analysts'earnings forecast in abroad, this paper enriches the research.(2) Based on the analysis of problems in securities analysts'earnings forecasts and its industry in china, this study gives some advice to raise the accuracy of securities analysts'earnings forecast by referring foreign experience.