Qfii Investment Behavior Of China's A-share Market

With the development of financial globalization, the financial capital flow from country to country frequently and extensively, which to a large extent accelerates the integration of the global economy. Under this circumstance, the domestic markets of various countries merge into the global financial markets day by day, and opening financial market becomes one of the most important problems that China faces. The inland security market implemented QFII system formally at the end of 2002, which generated relatively favorable results. In this article, the author compared the QFII system of the emerging market countries with the QFII system of China, and then did some empirical researches on the investment behavior of QFII investors based on their stock-holding data. On the basis of qualitative analysis and empirical researches, the author summarized the investment characteristics and influences of QFII investors in the A-share market, and put forward some policy suggestions on the perfection of QFII system in China.The focuses of this article are the empirical tests on the herding behavior and feedback trading strategy of QFII investors. Through the empirical researches, we found that QFII investors tend to trade stocks in herd, but we have no obvious evidence that they employ the feedback trading strategy. We didn't find that the trading behavior of QFII investors would destabilize the security market; on the contrary, the negative feedback trading on some stocks by QFII investors would help to stabilize the market. In the mean time, QFII investors played an important role of value-discoverer in the China security market, and they were also very excellent in asset management.