The Split Share Structure Reform Of Market Overreaction

Tradable share reform period, the traditional financial theory is unable to make a reasonable explanation to abnormal phenomena. In this paper, use the theory of behavioral finance market to analysis of the abnormal phenomena, and take out the hypothesis of the market overreaction. And making Shanghai and Shenzhen 300 listed companies (2006– 2008) for the study sample, test market over-reaction problems. The results showed: the split share reform period, there is a significant stock market overreaction.This article is a study from the following four parts:1,Share reform on the influence of stock price. No considering the case of external factors , the share reform on the influence of price theory. First, according to supply and demand theory, make qualitative analysis to the impact of the stock price. Re-use of non-tradable shareholders and tradable shareholders of the price game model, analysis of the impact of stock prices.2,In the share reform, the non-tradable shareholders and tradable shareholders are not the same position. In the inequality of game, the pros and cons to both sides, as well as on the price of the rate design. After government intervention, the non-tradable shareholders and tradable shareholders status are changed, re-distribution of benefits.3,Investors cognitive, emotional over-investment bias generated behavior. Investment process reflects the psychology of investors, due to cognitive bias, emotional bias and other bias exists, leading to different asset pricing bias, while the assets will in turn affect investors pricing error on the understanding and assessment of such assets .Non-tradable shareholders and tradable shareholders of cognitive, emotional bias by the line of research to identify the split share reform to change the causes of market overreaction.4,Over-reaction market, investors Strategies. According to the phenomenon of over-reaction and the specific formation of share price performance, make a right decision for investors making a feasibility operation.