The Impact Of Monetary Policy On China’s Real Estate Listed Company Stock Price

As a significant part of financial market, plays an increasingly important role inthe process of social resource allocation and social capital allocation. So the monetarypolicy as monetary authorities to manage the economy means must have a profoundand extensive influence to the stock market, and then control the whole economy.With the continuous development of our real estate securitization, the percent of listedreal estate companies in shenzhen and shanghai stock markets are increasing rapidly,consequently, it has more and more influence in our stock market. What’s more thereal estate virtual economy and real economy is connected by the listed real estatecompanies, so it’s necessary to research the effect of monetary policy on the stockprice of listed real estate companies.At first, this paper will makes theoretical analysis in monetary policy on theinfluence of our stock market. The research shows that interest rate on stock priceshas the influence of the negative relationship and have positive impact on relationsbetween money supply and stock prices. On that basis, we study the relationshipbetween real estate sector shares and large-cap shares and combined with caseanalysis, we initial guess the influence of the monetary policy to the stock price oflisted real estate companies. The results found that interest rate also has a negativeimpact on the stock price of real estate companies and there is obviously a laggingeffect. On the other hand, money supply has a positive impact on stock price of realestate.In order to verify the front theory is correct or not, the empirical part in this paperis arranged as following: First, we use unit root rest, Cointegration test and GrangerCausality tests to study how the interest rate influences the stock price of listed realestate companies and it demonstrates that interest rate and stock price exist along-term stable relationship.Second, we use the vector auto-regressive methods (VAR) to separately analyzemoney supply M0, M1, M2.It indicates that the VAR between money supply M0, M1,M2and stock price of real estate is unstable, but the VAR between their first orderdifference and share price of real estate is stable.Furthermore, we use variance decomposition analysis and impulse responseanalysis and it indicates the influence of M2to the share price is relatively largest. Asa result, this paper selects the one-year deposit rate and broad money supply M2as the representative of the monetary policy variables, and adopt the vectorauto-regressive model(VAR) to analyze the effect of monetary policy to the stockprice of listed real estate companies, found that the influence of interest rate to theshare price has reverse relationship, the influence direction between money supplyand share price of real estate cannot determine, in comparison, the interest rate exert atremendous influence on the stock price of listed real estate companies.At last, we summarize the front theoretical and empirical aspects of the results,and joined with the own condition of our stock market and real estate market, weanalyze the reasons what cause the effect of monetary policy significant. On that basis,we offer relevant policy proposals and suggestions.