| The stock market has developed in china for nearly twenty years, but it is still a "weak-form efficient market" for small and medium-sized investors. Due to the lack of effective information and expertise, most of the small and medium-sized investors mainly rely on securities analysts’ forecasts when analyzing the publicly listed companies. As the securities analysts have outstanding analytical skills and special information channels, their forecasts are often viewed as decision-making basis for many investors. Especially with the sharp swings of domestic macroeconomic situations, more and more investors pay close attention to securities analysts’predictive analysis. However, because of the market skittishness, bounded rationality of the professionals, as well as the stakeholder incentives, securities analysts’predictions may have a certain gap from the actual results. Then you may ask:are the securities analysts’ predictions reliable? How big the deviations are? Are there subjective-induced behaviors in professionals? In fact, few domestic scholars have done comprehensive studies to answer the above questions, and the relative researches are limited to individual industries and short time span which make the research findings incredible and meaningless in practice.Based on the above backgrounds, this paper makes an overall literature review to get the metric of earnings forecasts error. Then it takes two months to collect listed companies’earnings forecast data for the first half of the year of the top ten industries in2007-2011, which were calculated by securities analysts. And these data are searched from CSMAR, Great Wall Securities Software, National Bureau of Statistics Website, and China’s Securities Industry Association Website. This paper uses EXCEL and EViews6.0to do a detailed analysis for earnings forecasts error, and discusses the causes which affect the forecast accuracy differences among various industries, then puts forward appropriate suggestions to help investors make the reasonable decisions.The conclusions of this paper are as following:(1) the securities analysts make more predictions in valuable industries such as the steel industry, banking and real estate industry, but pay less attention to the low value industries like agriculture;(2)the macroeconomic situation is bound to affect securities analysts’ earnings forecast accuracy to listed companies. The forecast accuracy is obviously higher in better macroeconomic situation;(3) the securities analysts’forecast errors are different in various industries. The earnings forecasts to listed companies of banking, highway management and maintenance industry are much more accurate than other industries. And the forecast errors change most frequently in steel industry, electric power industry and automotive industry;(4) totally speaking, the forecasts of equity securities are more accurate than non-equity securities in one company. But it makes insignificant difference in the same industry.There are three innovation points in this paper:(1) viewing from research contents, this paper does a deep analysis on securities analysts’ earnings forecast accuracy to listed companies over the past five years, which may help rich the relative theory about forecast accuracy made by professionals;(2) it studies on securities analysts’earnings forecast errors among different industries, which may help rich the relative studies in china;(3) it adds stake as a index to forecast accuracy metric, which may exclude non-human forecast errors caused by changes in ownership.While spending a lot of time collecting data, there are still some shortages existing in this paper:(1) there are so many listed companies in china that it’s hard to study on everyone. So this paper just chooses top ten industries and ten largest companies from each industry;(2) as it is difficult to collect data over the past twenty year, this paper just selects relative data from2007to2011, which may affect the accuracy of research conclusions. |
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