Six Seller Of Securities Research Institutions Recommended Shares Of The Credibility Of Empirical Research

Since the startup of China's stock market in 1990,the market has already grown up to a relatively large market in terms of the numbers of the listed companies and the total volume of the market. With the grow-up of the stock market, the segments of the market have been more professional.More and more financial companies set up the research department focusing on the fundamental analysis.All these securities companies set up their research teams by industry divisions.The major tasks of sell-side analyst are giving recommendations to investors by writing analyst reports. Equity analysts'reports are based on some reasoning fundamentals related to the domestic market. This thesis will conclude some related principles and methods that are using by those equity analysts.The sell-side research institutions developed from the equity research department of the security companies.Till now, there are few independent or third-party sell-side equity research institutions.These institutions serve the investors by using their professional equity analysts. The next question is whether the investors will rely on those analysts.This article will analyze the sell-side analysts'reports by judging the real return of the institutional investors who are using those reports.I will cover six most famous domestic research institutions and consider the whole institution as an observable unit. Based on the real data, I believe that those research institutions' judgments or recommendations are not reliable, at least in some cases.But I should mention that those recommendations are more reliable in bearish market than in bullish market. By further analysis, I found out that all those six research institutions have some problems in portfolio pick-up, and the analysts'experience.On the other side, the independence of those research institutions and the supervision systems of equity research industry are also having some disadvantages.Last but not least, this article gives some suggestions for the future development of the sell-side equity research industry. This article will cover the factors such as the professionalism of the analysts, the team management skills and the industry's supervision system, Based on those suggestions, I believe that the sell-side research industry can be much healthier and it will play a more important role in building an effective market.